Report of the Presidential Review Commission on the Reform and Transformation of the Public Service in South Africa

Commissioners

The following were appointed as Commissioners by the President.

Dr. Vincent T. Maphai (Chairperson)
Prof. Norman Levy (Deputy Chairperson)
Prof. Bax D. Nomvete
Prof. Fanie Cloete
Dr. A.W. Johnson (Canada)
Ms. Motlatjie A. Letsebe
Mr. Sam Marotoba
Ms. Ayesha Mohamed
Prof. Aaron M. Ndlovu
Mr. Lot M. Ndlovu
Mr. Lennart Nilsson (Sweden)
Dr. M. Nzuwah (Zimbabwe)
Mr. Gavin H. Pieterse
Dr. Neva Seidman-Makgetla
Sir Kenneth Stowe (Britain)
Mr. Clem Sunter

Mr. Sam Marotoba never took his seat on the Commission. In 1997 Prof. Aaron Ndlovu and Ms. Ayesha Mohamed resigned, for personal reasons. Dr. Seidman-Makgetla's membership also terminated, following her appointment to a senior post in the Department of Public Service and Administration. Ms. Motlatjie Letsebe joined the Office of the Deputy President in January 1998, after the completion of the Commission's report but before the signing.

The most significant change to the membership occurred when the first Chairperson, Professor Nomvete, requested the President to relieve him of his duties. Following this development, Dr. Vincent Maphai was appointed Commission Chair in April 1997. Professor Levy became Deputy Chairperson.

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Strategic and task team members

Prof. Iraj Abedian*	School of Economics, University of Cape Town
Ms. Tania Ajam	School of Economics, University of Cape Town
Mr. Conrad Barberton	Consultant
Ms. Nozipho January-Bardill	Consultant
Dr. Alf Carling*	International Expert, Government of Sweden
Ms. Anne Evans	Special Advisor to the South Africa/Canada Programme on Governance
Dr. Meshack Khoza	Centre for African Research & Transformation, University of Natal/Durban
Mr. Aubrey Malabie	Consultant
Mr. Andrew Merrifield**	Council for Scientific and Industrial Research
Dr. Benny Mokaba*	Department of Welfare
Mr. Sam Mphuthi	Consultant
Mr. B. R. Naidu*	Human Sciences Research Council
Mr. Lars Ohlsson	International Expert, Government of Sweden
Ms. Gemma Paine	School of Public and Development Management, University of the Witwatersrand
Ms. Rosemary Proctor	Special Advisor to the South Africa/Canada Programme on Governance
Dr. Derrick Swartz*	Institute of Government, University of Fort Hare
Prof. Chris Tapscott*	School of Government, University of the Western Cape
Ms. Glenda White	Consultant

* Members of the Strategic Team
** Member and Convenor of the Strategic Team

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Additional contributors

South African consultants

Mr. Sam Amod (Consultant)
Mr. Roger Layton (Consultant) -- in cooperation with Mr Chris Rowse
Mr. Simon Ratcliffe (Consultant) -- in cooperation with: Mr. Patrick Brennan, Ms. Avril Joffe, Ms. Shelley Kestan, Ms. Judith Kippin and Ms. Janine Rauch)
Prof. Nico Steytler (Community Law Centre, University of the Western Cape)

International experts

Mr. Richard Heeks (Institute for Development Policy and Management, University of Manchester)
Mr. Willy McCourt (Institute for Development Policy and Management, University of Manchester)
Mr. Martin Minogue (Institute for Development Policy and Management, University of Manchester)
Mr. David Mundy (Institute for Development Policy and Management, University of Manchester)
Ms. Deborah J Williams (Adviser on Public Sector Management and Finance)

Commonwealth advisers

Dr. Robert Dodoo (Head of Civil Service, Ghana)
Mr. Gordon Drapper (Consultant, Trinidad and Tobago)
Mr. Peter Harrison (Associate Deputy Minister, Human Resources, Canada)
Dr. Mohan Kaul (Director Commonwealth Secretariat, India)
Ms. Caroline Kerry (Consultant, Australia)
Datuk Dr. Johari bin Mat (Secretary General Ministry of Education, Malaysia)
Mr. Alex Matheson (Special Adviser, Commonwealth Secretariat, New Zealand)
Mrs. Florence Mugasha (Head of Civil Service, Uganda)
Mr. Joe Tabone (Consultant, Canada)
Ms. Philippa Wood (Consultant, New Zealand)

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Acknowledgements

The Commission's work has benefited greatly from the support and assistance of a variety of individuals and organisation in both the public and private sectors. We are indebted to them all, and especially the following:

Ministers, Deputy Ministers, Director Generals, senior personnel, as well as Transformation and Special Programmes Officers. Often they had to respond at short notice and in all cases they did so generously and promptly.
The Swedish, Canadian and British governments provided both financial resources and professional expertise. The Commonwealth Secretariat co-sponsored workshops with the PRC and also provided professional expertise.
Several staff members were seconded to the commission, while their employers carried the costs. These include Zola Ngcakani from The Water Research Commission and Tladi Ditshego from the National Business Initiative for Growth, Development and Democracy, who respectively acted as Executive Secretary and Programme Manager in the initial phase of the PRC. Jackie Lange was also seconded for a brief period from Engen Petroleum Limited. Ansie Dubrey and Phillip Chauke were seconded researchers from the Human Sciences Research Council (HSRC). In addition, the Commission Chairperson, Vincent Maphai and the Head of the Human Resources Task Team, BR Naidu, also came from the HSRC. Andrew Merrifield, convenor of the Strategic Team, came from the Council for Scientific and Industrial Research.
A team of dedicated persons worked beyond the call of duty --coordinators, members of sub-groups, resources persons, and the authors of the specialist and process studies.
Mr. Ben Lindeque coordinated a small but efficient core of secretariat and administrative staff. The secretariat provided project management support and coordinated logistics to enable effective functioning of the task teams. Of the seven secretariat positions, four were used for capacity- building. New appointees, without prior experience, were trained on the job. Their job prospects within the public service and elsewhere were thereby enhanced.
The first commission chairperson, Professor Nomvete will be remembered for his strong leadership and commitment. He remained the commission's friend even after his departure.
The Parliamentary Portfolio Committee provided a forum for the commission to maintain its accountability. We are grateful to its Chairperson, Mr. Salie Manie, for his interest and unflinching support.
The reference panel for the Budgeting and Financial Management task team -- Drs. Mohammed Jahed, Leila Patel, Bethuel Setai and Messrs. Job Mokgoro, Murphy Morobe, Nols du Plessis, Andre Roux, Sipho Shezi, Gert van der Linde.
The Anglo American Corporation for printing the colour charts for the Statistical Analysis of Public Service Personnel in South Africa.
Finally, we thank John Bardill, School of Government, University of the Western Cape for the arduous task of editing and compiling the various sections of the Report. We are indebted to him for his cooperation and conspicuous commitment beyond the call of duty.

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Abbreviations

AA	Affirmative Action
AG	Auditor General
ASD	Alternative Service Delivery
BAS	Basic Accounting System
BPR	Business Process Re-engineering
CGIO	Chief Government Information Officer
CIO	Chief Information Officer
CIU	Coordination and Implementation Unit
COSATU	Congress of South African Trade Unions
CSIR	Centre for Scientific and Industrial Research
CSS	Central Statistical Services
DACST	Department of Arts, Culture, Science and Technology
DCD	Department of Constitutional Development
DDG	Deputy Director General
DFID	Department for International Development (UK)
DG	Director General
DGAS	Department of General Administrative Services
DoC	Department of Communication
DoF	Department of Finance
DoSE	Department of State Expenditure
DPSA	Department of Public Service and Administration
DTI	Department of Trade and Industry
EU	European Commission
EXCO	Executive Council (of the Provincial Governments)
FFC	Finance and Fiscal Commission
FMS	Financial Management System
GDP	Gross Domestic Product
GEAR	Macro-Economic Strategy for Growth, Employment and Redistribution
GIP	Government Information Project
GISPB	Government Information Services Policy Board
GNU	Government of National Unity
HOD	Head of Department
HR	Human Resources
HRD	Human Resources Development
HRM	Human Resources Management
HRP	Human Resources Provisioning
HSRC	Human Science Research Council
HTML	Hyper Text Mark-Up Language
ICT	Information and Communications Technology
IFR	Intergovernmental Fiscal Relations
IGF	Inter-Governmental Forum
IGR	Inter-Governmental Relations
IM	Information Management
IMST	Information Management Systems and Technology
Info-Com 2025	National and Government Information and Communication Technology Strategy
IS	Information Systems
ISAD	Information Society and Development
IT	Information Technology
ITEXCO	IT Executive Committee
MBO	Management by Objectives
MEC	Member of the Executive Council (of the Provincial Governments)
MinComBud	Ministers Committee on the Budget
MINMEC	Ministerial Forum (of national Ministers and Provincial MECs)
MPCC	Multi-Purpose Community Centre
MPL	Member of the Provincial Legislature
MPSA	Ministry for Public Service and Administration
MTEF	Medium Term Expenditure Framework
NCHE	National Commission for Higher Education
NCOP	National Council of Provinces
NEDLAC	National Economic Development and Labour Council
NGO	Non-Governmental Organisation
NICRO	National Institute for Crime Prevention and Rehabilitation of Offenders
NPR	National Performance Review
NQF	National Qualifications Framework
NTIS	National Transport Information System
OCS	Office of the Cabinet Secretariat
ODP	Office of the Deputy President
OECD	Organisation for Economic Co-operation and Development
OGIT	Office of Government Information Technology
OPSC	Office of the Public Service Commission
OPM	Office of Public Management
PAS	Personnel Administration Standard
PBPB	Performance-Based Programme Budgeting
PERSAL	Personnel and Salary Information System
PFI	Private Finance Initiative
PHC	Primary Health Care
PMS	Provisioning Management and Administration System
PPMS	Personnel Performance and Management System
PRC	Presidential Review Commission
PSC	Public Service Commission
PSSC	Public Service Staff Code
RDP	Reconstruction and Development Programme
RFS	Request for Solutions
SACS	South African Communication Services
SALGA	South African Local Government Association
SAMDI	South African Management and Development Institute
SACOB	South African Chamber of Business
SANCO	South African National Civics Organisation
SAQA	South African Qualifications Authority
SARS	South African Revenue Services
SMME	Small, Medium and Micro Enterprises
TCF	Technical Committee on Finance
TIC	Technical Intergovernmental Committee
WPPSTE	White Paper on Public Service Training and Education
WPTPS	The White Paper on the Transformation of the Public Service

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Chapter 1: Introduction

Developing a culture of good governance
Mandate and terms of reference of the PRC
Background and context
Reviewing the mandate and reconstituting the PRC
Revisiting the priorities: Towards the development of a culture of democratic governance
Revised methodology and approach
Structure of the report
Additional reports by the Commission

1.1 Developing a culture of good governance

This report contains the main findings and recommendations of the Presidential Review Commission (PRC) in relation to the operation, transformation and development of the South African Public Service, and in particular to the creation of a new culture of governance. Our view of such a culture, taking account of world-wide experience, is that it should help:

To protect and enhance representative and participatory democracy;
To support civil society and its interaction with government;
To promote economic and social development and the advancement and empowerment of disadvantaged people and communities;
To shift power and authority from central government to provincial and local government, within a framework of national norms, standards and values;
To locate responsibility for achieving efficient and effective delivery of services to the lowest possible level;
To ensure that ethical and professional standards are developed and maintained throughout the public service and all other organs of state;
To ensure that the functions and records of government are open to public view and appraisal;
To secure accountable and transparent stewardship of public resources, so as to build the kind of society envisaged in the 1996 Constitution;
To reward achievement, acknowledge failure and give redress to grievances.

It is our hope that this report will assist in moving the public service in this direction. However, the final responsibility for implementing our recommendations, if accepted by the President, rests with the Office of the President to appoints officials or establish an agency to oversee their implementation.

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1.2 Mandate and terms of reference of the PRC

The need for the PRC was first highlighted in The White Paper on the Transformation of the Public Service (WPTPS), published in 1995. The WPTPS proposed the creation of a number of new and additional structures to add impetus to the transformation process, and to ensure in particular that it was "founded upon effective consultation with public service staff and unions, and civil society stakeholders" (WPTPS, para 6.2 ). These structures included a Presidential Review Commission, to be established as a matter of urgency, together with a number of other structures such as the Public Sector Transformation Forum and Departmental and Provincial Transformation Units.

The PRC was officially titled The Commission of Inquiry Regarding the Transformation and Reform of the Public Service. Its terms of reference were published on 8 March 1996 (Government Gazette No. 17020), with the specific mandate to:

"inquire into the structures and functions of the public service and its statutory bodies;
conduct an internal audit and review of each ministry, department, provincial administration, organisational component, office and agency concerning its objectives, structure, function, staffing, financing and related matters; and
conduct a review and revision of the systems, routines and procedures of planning, budgeting and financial execution in the public service, to increase public accountability.
with a view to making recommendations and proposals regarding the transformation and reform as envisaged in the White Paper on the Transformation of the Public Service, Notice No. 1227 of 1995, published in the Government Gazette No. 16838 of 24 November 1995."

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1.3 Background and context

The underlying principles and purpose of these terms of reference were derived from the WPTPS, as well as the core democratic values governing public administration as contained in the Interim Constitution and the present Constitution (Chapter 10, para. 195:1 of Act 108 of 1996). Together these documents constitute the framework of the Commission's remit to provide for the creation of what the mission statement of the WPTPS describes as a "people centred and people driven public service... characterised by equity, quality, timeousness and a strong code of ethics" (WPTPS, para 2.1). This mission was in turn based on a redefinition of the role of the state and its relationship to civil society, encompassing a partnership between the two rather than the essentially antagonistic relations which prevailed in the past.

The PRC's key role, therefore was to assist in the processes of transforming the state and its principal executive arm, the public service, from an instrument of discrimination, control and domination to an enabling agency that would consolidate democracy and empower communities in ways that were demonstrably accountable and transparent (WPTPS, para 2.3). This would involve, among other things, making recommendations for overcoming many of the serious challenges and constraints facing the transformation process, many of them inherited from the previous regime. These included:

The lack of racial, gender and occupational representativeness;
The lack of clarity and communication in respect of the vision for change;
Centralised control and top-down management.
Poor productivity;
The low level of service delivery, especially to the majority population;
A disempowering work ethic;
The absence of clearly defined roles and responsibilities;
The lack of effective co-ordination and communication among the key agencies of transformation.
The persistence of rule-bound practices and culture.

The WPTPS sought to address these and other challenges by proposing programmes that required both radical institutional change and far reaching transformation, not all of which could be effected incrementally. The establishment of the PRC in March 1996 was intended to support and consolidate these initiatives, and to recommend viable changes that would facilitate the transition and provide a framework for more fundamental transformation.

For a variety of reasons the early stages of the Commission's work (between March 1996 and April 1997) was marked by a number of bottlenecks which seriously delayed progress. At the same time the process of public service reconstruction and development had acquired its own momentum. This was partly due to the pressure of events and partly because there were now a number of positive departmental responses to the White Paper and important regulatory initiatives that enabled a representative number of competent officials to be appointed at senior levels in government who could respond to the new challenges.

It therefore became increasingly apparent to the Commissioners, the Minister for the Public Service and Administration, his senior officials and the international partners that the public service context within which the Commission was working was itself changing rapidly. The pressure of events between 1994 and 1997 required action by the government on a number of specific issues on which, given time, it would have been appropriate for the Commission to have made recommendations. These included:

The establishment and development of the new Department of Public Service and Administration DPSA), and its assumption of many of the executive duties formerly associated with the Public Service Commission (PSC) and Provincial Service Commissions established by the Interim Constitution;
The changing role, powers and duties of the PSC, under the new Constitution;
The publication of a range of important policy documents from the DPSA, designed to take the WPTPS process further^;1
The proposed reduction of 300,000 in the number of public service posts;
The audit by the DPSA of the performance of provincial governments (published as The Provincial Review Report in 1997);
The development of a strategy for utilising information technology; and
The revision of the massive, complex rule-book of public service regulations, particularly as contained in the Public Service Staff Code (PSSC).

The products of these initiatives by the Minister and his department have been made available to the PRC and where appropriate these have been commented on in the Report.

In addition, the work of the Commission was also informed by the new Constitution that was introduced in 1996, as well as by the RDP and other policy initiatives and legislative changes that impact on the public service. Of particular importance was the introduction in June 1996 of the Government's Macro-Economic Strategy for Growth, Employment and Redistribution (GEAR), which imposed new fiscal constraints on the public sector. Other important initiatives included the new Labour Relations Act (1996), the Department of Labour's Green Papers on Employment and Occupational Equity (1996) and A Skills Development Strategy for Economic and Employment Growth in South Africa (1997), and the Open Democracy Bill.

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1.4 Reviewing the mandate and reconstituting the PRC

Against this background it became increasingly obvious that the original work programme of the PRC was too ambitious to complete, especially given the delay caused by the administrative obstacles that prevented the Commission from proceeding beyond November 1996. It was therefore no longer feasible to follow the original business plan and strategic design within what remained of the statutory timeframe of the Commission, particularly in the light of the Commission's logistical capacity and the ancillary activities of the DPSA and PSC.

The original business plan was therefore suspended at the end of 1996. The Chairperson, Professor Bax Nomvete resigned and the Commission was itself reconstituted with Dr Vincent Maphai and Professor Norman Levy appointed as Chairperson and Deputy Chairperson respectively. A new Business Plan was adopted in June 1996, constructed around two key components:

The conducting of a series of public sessions of the Commission at which ministries, departments, provinces, the PSC and other relevant stakeholders were invited to give evidence and make comments on the progress of the transformation process;
The establishment of four small, professional task teams to consider the key areas of structures, human resource development, financial planning and management, and information management and technology.

In support of the Task Teams, a number of process and specialist studies were also commissioned (see later). As before, support was generously provided by the Commission's international collaborators, not least the Commonwealth Secretariat. And as can be seen from the schedule of briefings (in Appendix 4 of this report), the key areas of government were examined following full presentations from departments, provinces, ministers and their deputies, amongst others.

At the outset, the strategies and methodologies adopted by the Commission were defined by how it perceived its role. The Commission aimed at fair and sound judgements which displayed a practical awareness of the many difficulties encountered in the public service. At the same time, it wanted to provide a vision underpinned by practical and implementable recommendations. Specifically, the Commission did not perceive itself as a tribunal investigating crime or misdemeanour. Its fundamental role was to understand the problems that many committed people within the service were trying to grapple with, and to advise the President on the strategic direction of the public service. This attitude facilitated the Commission's work immensely. Departments and ministries were less defensive than might otherwise have been the case.

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1.5 Revisiting the priorities: Towards the development of a culture of democratic governance

Since the inception of the PRC, significant change has been effected in terms of representivity, policy formulation, and institutional re-engineering at national and provincial levels of government. Such changes have, however, been implemented unevenly. To a considerable extent, therefore, the essential ingredients of good governance are still missing, including the development of an effective culture of democratic governance.

These essential elements include:

Effective service delivery;
Coherent organisational structures, including the organisation and design of ministries, departments and quasi-independent units of government;
Appreciably transformed human resource practices;
Acceptable levels of financial planning and management;
Viable forms of inter-governmental relations
Appropriate arrangements for the functioning of political and administrative personnel.

While plans for the development and introduction of more effective systems of information management and technology are currently on the drawing board, they have not as yet been fully agreed, let alone implemented - hence the Commission's additional concern in this regard.

The deficiencies of the public service were less visible as long as it performed the routine tasks that sustained apartheid. The new political dispensation and the consequent need to deliver services efficiently, equitably and cost-effectively to the whole population, has provided the greatest challenges and severely constrained its capacities.

The focal question for the PRC was therefore how to make the public service a legitimate and effective development-oriented instrument of long-term transformation, capable of bringing services to the whole population on an equitable basis, and of facilitating the development of service excellence and public sector democratisation in the medium and the long-term in all sectors and regions.

This focus provides a basis for the interpretation of the spirit of the WPTPS and the formulation of the Commission's tasks for the reform and transformation of the Public Service. The key themes envisaged by the WPTPS for reform and transformation included:

Improving the quantity, quality and equity of service delivery to all citizens;
Changing the racial, gender and disability composition of employment in the Public Service;
Creating an integrated and unified framework for the operation of the public service at national and provincial levels;
Determining the right size for a productive public service, involving the re-prioritisation and optimal allocation of human and other resources;
Promoting a cost-effective public service, capable of achieving an appropriate balance between effective services and an environment of fiscal constraint;
Improving the strategic prioritisation and planning processes;
Ensuring effective systems for the monitoring and review of public service performance;
Improving co-ordination and communication;
Ensuring effective consultation and participation (by employees, customers, and the public as a whole) in the planning and operation of the new public service ;
Promoting internal democratic work practices and external accountability;
Building new management and leadership practices, as well as new organisational cultures reflecting the diversity of South African society;
Prioritising individual and institutional capacity building through the development and introduction of appropriate programmes of human resources planning, development and training;
Ensuring that financial control mechanisms work;
Developing a professional work ethic;
Eliminating corruption.

Together such measures, if effectively implemented, should help to ensure the development of a new and effective culture of democratic governance in South Africa.

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1.6 Revised methodology and approach

Following the interruption of its inquiries and the temporary cessation of its activities, the detailed work of the PRC only effectively resumed in June 1997 after the adoption of its revised Business Plan. However, the Commission still needed to complete its work timeously (by early 1998), cost-effectively and with due regard to quality, relevance and an acceptable level of sampling. This placed obvious constraints on its work-plan. These were reflected in the revised methodology adopted by the Commission in its June 1997 business plan, particularly in relation to:

The determination of its core inquiries and an appropriate organisational design;
Proposed outcomes;
The scope of the Commission's activities;
Process;
Sampling;
Specialist, Process and International Comparative Studies;
Written Submissions;
Focus Groups;
The appointment of a Strategic Team of knowledgeable persons to assist the Commission in the performance of its core functions.

1.6.1 Core inquiries and organisational design

As the aim of the PRC was to establish medium to long-term frameworks and performance assessment criteria for strategic interventions in key areas decisive to the on-going process of restructuring and reform, the core inquiries of the commission were re-classified under four main headings or themes. Self-contained but nevertheless cross cutting and inter-related, these four themes were:

Structures and Functions of the Public Service;
Human Resources Management and Development;
Budgeting and Financial Management;
Information Management, Systems and Technology.

It was felt that these four key areas would capture the substantive issues under inquiry and provide optimal opportunities for an interactive process of debate by commissioners, task team leaders and members, members of the strategic team, and other important role-players. For each of the four areas a convenor and task team was commissioned. The four convenors were represented on the strategic team which was set up to plan and oversee progress. Each of the four task teams were allocated one or more commissioners to assist in the supervision and carrying out of their work.

For the work of the four task groups a common but flexible methodology and format was adopted to guide their inquiries.

This methodology and format included:

The macro-Institutional context of Public Sector Management
Problem statement
The mission, vision and goals of the department or agency;
The machinery of government decision making
Management Systems, Culture and Practices;
Operational and Service Delivery Issues
Monitoring and evaluation.
Recommendations

1.6.2 Proposed outcomes

Methodologically, the inquiries would be expected to have as their outcome a number of recommendations that would seek, amongst other things:

To transform the management and organisation of government and its structures to best support the implementation of the policies of the government of the day;
To enhance the capacity of personnel and institutions to deliver governmental services in an efficient, effective and well-targeted fashion;
To improve the public ethos;
To promote further representivity in the public sector;
To improve the performance of line departments;
To improve financial planning and management systems;
To promote the development of capacity in the utilisation of electronically-enabled information systems to more effectively assist in the processes of governance and public management.

1.6.3 Scope

In the light of the broad definition of public administration contained in the 1996 Constitution, the Commission felt that it would have been within the scope of its terms of reference to include local government and the parastatals within its inquiries. However, given the large size of the public service² and the short timescale for the completion of its work, the Commission decided to confine its investigations to the public service as defined in the 1994 Public Service Act, and therefore to exclude both local government and public enterprises.

This decision was arrived at in the interests of sustaining the manageability and quality of the Commission's final report. In view of the importance of local government in respect of the local delivery of services, and its relationship to the other tiers of government, the Commission nevertheless recommends that a separate inquiry be undertaken into this area by an independent Commission appointed for this purpose. Such a Commission, if appointed, might choose of course to be guided in its work by the methodology, findings and recommendations of the PRC.

1.6.4 Process

In compiling the findings and recommendations contained in this report, the Commission, its strategic team and its four main task teams made use of the following investigative techniques and sources of information:

Original research and investigations carried out by the members of the strategic team and the four task groups;
Verbal presentations before the Commission by government departments, agencies, provincial administrations and other interested stakeholders, including business and labour (see Appendix 4).
Written submissions by government departments, agencies, provincial administrations and other interested stakeholders and individuals, including business and labour (see Appendix 5);
Specialist and process studies commissioned from local and international experts;
Focus groups with politicians, senior management and other interested stakeholders.

Additional details on these processes are provided in subsequent sections of this introductory chapter of the report.

1.6.5 Sampling

In its original terms of reference the Commission was charged with carrying out an in-depth investigation into the operation of each ministry, department, provincial administration, organisational component, office and agency. Given the constraints under which the Commission has operated since June 1997, when its real work effectively started, this would have been an impossible task. The Commission therefore agreed that it would be necessary to concentrate its work on a sample of such organisations and agencies. Providing such a sample was sufficiently comprehensive and inclusive, and backed-up by additional research, focus groups and written submissions, the Commission felt that the significance and integrity of its findings and recommendations would not be unduly compromised.

To this end the following organisations and agencies were invited to make presentations at public hearings of the Commission (see Appendix 4 for more detail):

19 out of the 32 national departments (see Appendix 4). Presentations were made in most cases by both the political and administrative heads of these organisations;
5 out of the 9 provinces (Eastern Cape, Gauteng, Kwa-Zulu Natal, Northern Province, Western Cape). Again presentations were made by both political and administrative heads;
The Offices of the President and Deputy President;
The Provincial Secretariats for Safety and Security in Gauteng, Mpumalanga and the Western Cape;
Three organisational components (South African Revenue Services, Central Statistical Services, and SAMDI);
Two statutory agencies (The Public Service Commission and the Finance and Fiscal Commission);
COSATU;
Business (were invited to make a presentation, but chose to submit a written commentary instead).
Consultations with the Deputy President and with the Ministers for Justice, the Public Service and Administration, Safety and Security, and Trade and Industry;
Consultations with the Offices on the Status of Women and Disabled Persons, the South African Chamber of Business, and the Public Servants Association of South Africa.

To ensure as inclusive a coverage as possible, departments were grouped according to their direct involvement in the following four functions:

Asset delivery (such as Land, Housing and Water Affairs);
Service delivery (such as Education, Health and Welfare);
The indirect provision of services (such as Finance, Justice and Safety and Security);
General administration (such as the DPSA and State Expenditure).

This classification assisted the Commission in the selection of departments for more detailed study and investigation.

Those national departments, agencies and provinces that were not selected for formal presentation of their transformation strategies were required to submit written documentation in respect of these as well as provide details of their core activities to the Specialist and Process Study teams appointed by the Commission (see in more detail below).

1.6.6 Specialist, Process and International Comparative Studies

The Commission's Final Report reflects the research contributions of the Commissioners and members of the Strategic and Task Teams, as well as those of a number of specialist consultants specifically commissioned to augment expertise within the Commission. The overall impact of these specially commissioned empirical studies has been to strengthen, and in some instances modify, the conclusions reached by the Commissioners and members of the Strategic and Task teams.

1.6.6.1 Specialist Studies

Specialist studies provided a more focused and detailed analysis of departmental structures, composition, organisational design, human resource management and financial administration. The specialist statistical analysis of the racial, gender and occupational distribution of public service employees in the provincial and national departments, complements the other specialist studies by providing a detailed audit and evaluation of progress towards representivity and employment equity. Seven specialist studies were carried out on the following topics:

Human Resources
Inter-Governmental Relations
The Use of IT in the Public Service
Planning and Budgeting in South Africa
Budgeting and Financial Management
Financial Transfers
Procurement

1.6.6.2 Process Studies

The process studies served to conduct a targeted audit of selected provincial and national departments. These were of an operational and structural kind, mapping the processes and establishing the bottlenecks at the core of service provision. They were effective in assisting Commissioners in the analysis of key process-bottlenecks which impede the quality of service and impact upon the cost effectiveness and efficiency of whole line departments and public service personnel.

Five process studies were carried out on the following topics:

Recruitment and Selection
Service Delivery
National and Provincial Budget Processes
Procurement
Process Analysis of Transactions ( Data-Flow in the Public Service)

1.6.6.3 International Studies

The utilisation of international specialists has likewise been productive in providing in-depth descriptions of current best practice and international perspectives in respect of their specialist themes. International specialist teams were utilised from the Commonwealth Secretariat and the UK Department for International Development (DFID), as well as a further two specialists from Canada with long-term experience in the public service. Five studies were carried out on the following topics:

Ideas and Practice in Public Management Reform
Human Resources Management: International Comparative Experience and Benchmarking
Financial Planning, Accountability and Management in the UK
Transforming the South African Public Sector using IT: A Core-Periphery Approach
Managing Reform Processes: Some Ideas from the Commonwealth

In addition to the specially commissioned studies, the internationalist specialists made available a number of documents to the PRC that were particularly relevant to its work. These included:

Governing Strategically: The New Zealand Experience
New Zealand: Chief Executive Performance Agreement
OECD: The Changing Role of the Central Budget Office
Budgetary Institutions and Expenditure Outcomes: Binding Governments to Fiscal Performance -- A Study of Ghana, Uganda and Malawi

1.6.7 Written submissions

An important part of the process followed by the Commission was to secure a fully representative sample of the views of the public regarding the core themes of the PRC. The mechanism adopted was to request written public submissions from both the public and private sectors in response to advertisements placed in representative and accessible selections of the mainstream media. The process followed was to classify the submissions according to the following seven categories and to analyse and incorporate the content, where appropriate, in the report.

The seven categories were:

Public Sector respondents
Business
Labour
Non-Governmental Organisations
Professional Associations
Tertiary institutions
Individual submissions

In the event, over 70 written submissions were made, covering a wide range of themes. A list of such submissions, together with a summary of the contents, is provided in Appendix 5. In addition, written submissions were also received from a number of departments and agencies in response to questions from the PRC following their presentations to the Commission.

1.6.8 Focus groups

In general, the research process sought to gather information from a range of sources and to synthesise that information into preliminary findings which could then be discussed with key state personnel in focus groups. These served to assist Commissioners and the members of the Strategic team in identifying current examples of best practice. Focus groups were used particularly by the task teams on Financial Planning and Management, and Information Technology.

1.6.9 The appointment of a strategic team

The work of the Commission was facilitated by the establishment of Strategic Team. Members of this team were selected in terms of Schedule 8 (1) of the Commission's Regulations which allows for the appointment of knowledgeable persons in a capacity other than commissioners to assist the Commission in its work. The members selected were specialists in the fields of public sector management, financial planning, human resources development and information systems. To a large extent they constituted the main instrument to drive the work of the Commission.

The team comprised a convenor and 8 other members. Three of these were technical specialists, sponsored by the UK, Swedish and Canadian Governments respectively. The remaining 5 were South Africans. Their function was to facilitate the process of the inquiry, to advise the Commissioners on all their deliberations, to formulate appropriate research questions, and to contribute to the analysis of issues raised during the course of the public presentations and regular strategic sessions of the Commission. An equally important undertaking of the Strategic Team was the elaboration of a detailed work strategy and participation in the four substantive task teams of the Commission. As such, their responsibilities included carrying out empirical investigations of a qualitative and quantitative nature, maintaining oversight of the specialist researchers, and developing (in conjunction with participating departments) a set of public sector benchmarks. Finally they were tasked with assisting the Commission in compiling the composite draft and final reports for approval by the full membership of the Commission. Although the final responsibility for the Report rests with the Commissioners, the part played in the process by the Strategic Team was in many ways crucial.

1.6.10 International commissioners

In drawing on the international experience the Commission benefitted enormously from having four members with substantial experience of public service reform and modernisation in other countries. The four International Commissioners have, however, wished it to be recorded that, their contribution having been made, they see this Report as essentially South African, written by and for citizens of the new South Africa, and worthy to be received as such. They commend it accordingly.

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1.7 Structure of the report

In addition to this introductory chapter, the following report contains six main chapters. These are:

Chapter 2 which provides an overview (entitled "How Government is Working") of the Commission's main findings, observations and recommendations.
Chapter 3 which focuses on issues, findings and recommendations related to structures and functions within the public service.
Chapter 4 which focuses on issues, findings and recommendations related to human resources management and development.
Chapter 5 which focuses on issues, findings and recommendations related to financial management and planning.
Chapter 6 which focuses on issues, findings and recommendations related to information management, systems and technology.
Chapter 7 which sets out the Commission's conclusions and a summary of key recommendations.

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1.8 Additional reports by the Commission

In addition to this composite report, the Commission also plans to publish a number of the specialist, process and international studies outlined above. Together with the Commission's business plan and a detailed statistical analysis of public service personnel, these will be attached as annexures to the main report, as follows:

Annexure 1 - Business Plan
Annexure 2 - Statistical Analysis of Public Service Personnel
Annexure 3 - International Comparative Studies
Annexure 4 - Inter-Governmental Relations
Annexure 5 - Human Resources
Annexure 6 - Finance, Budgets and Procurement
Annexure 7 - Service Delivery in the Public Service
Annexure 8 - Information Management, Systems and Technology

Several of these annexures contain more than one study on the topic. For full details on the contents and authors, see Appendix 2 in this report.

1. These include the White Paper on Service Delivery (1997), the White Paper on Public Service Training and Education (1997), the Draft White Paper on a New Employment Policy for the Public Service (1997), the Green Paper on a Conceptual Framework for Affirmative Action and the Management of diversity in the Public Service (1997), and the Green Paper on A New Law for a New Public Service: Policy Proposals for a New Public Service Statute (1996)

2. The public service currently comprises approximately 26 ministries; the Offices of the President and Deputy President; the Public Service Commission; 32 departments aligned to the various ministries; 5 quasi-independent organisational components, including the South African Revenue Services (SARS), the Centre for Statistical Services (CSS); the Independent Complaints Division, the South African Communication Services (SACS) and the South African Management and Development Institute (SAMDI); and the nine provincial administrations, each with a wide range of departments interfacing with each other, and inter-acting at inter-governmental levels.

Chapter 2: Overview of how government is working

Background and context
Overview and assessment of the reform process
The Presidency and Cabinet
Inter-governmental relations (IGR)
National ministries and departments
Provincial administrations
Building resources and capacity for good governance

2.1 Background and context

2.1.1 Introduction

This part of the Commission's report constitutes an overview of how government is working. It spells out insights into ministries, departments and provinces. This is done through the examination of key themes and issues which have emerged from our studies and investigations. Precisely because this is an overview, much detail and substantiation have been omitted. The detailed evidence for the overview is to be found in the four substantive chapters (chapters 3-6) of the report which focus respectively on:

Transforming the structures and functions of government;
Human resources management and development;
Budgeting, financial management and accountability;
Information management, systems and technology.

The Commission concludes that, given the Government's stated national goals with respect to reconstruction and development, nation building, community empowerment and democratic consolidation, the role and functions of the public services have to be rethought fundamentally. We offer a framework for such a role. We believe "in principle" too, that there is no justification for the massive number of public officials, given the resources available and the priorities of government. The present Government has retained, and added to, what has been essentially a public service characterised by "separate development" duplication. This is simply unsustainable. Furthermore, the inability of the state to compete with private sector salaries may suggest the need for a smaller, professional, highly skilled and well-paid public service. In short, the corner-stone of the new public service should be social need, capacity, and cost.

2.1.2 Background

The nineties witnessed a radical shift from the politics of conflict and confrontation to the politics of negotiation and consensus building in South Africa. This sea change, which resulted in the Interim Constitution of 1993 and the New Constitution of 1996, is important as it fundamentally altered the conception of societal transformation and nation building in South Africa.

The major achievement of this process has been the democratisation, for the first time, of South African society. While problems abound, even the most determined sceptics are likely to note the shared conviction among South Africans that "democracy is here to stay." There exists little, if any, threat to democracy itself. The very appointment of this Commission, we hope, is another indication of the widespread commitment to transparency and open governance. It is seldom that a newly elected government would subject itself, so soon after assuming office, to an independent and rigorous examination. We commend the President and the Government for this measure.

In the past three years several government departments and provincial administrations have introduced far reaching institutional changes and policy reforms. The injection of "new blood" into the public service after 1994 has generally resulted in an improvement in the extent of service provision. There have been remarkable cases where new and old managers within the public sector have worked effectively together and mobilised their limited resources to produce innovative and creative ways of improving the service. At the same time, however, there are departments and provinces which have lagged behind in this respect.

In the White Paper on the Transformation of the Public Service (WPTPS), released in 1995, the Government outlined a broad policy framework for transforming the South African public service in line with the following vision:

The Government of National Unity is committed to continually improving the lives of the people of South Africa by a transformed public service which is representative, coherent, transparent, efficient, effective, accountable and responsive to the needs of all (WPTPS, para. 2.1).

In pursuit of this vision, the Government developed the following mission statement:

The creation of a people centred and people driven public service which is characterised by equity, quality, timeousness and a strong code of ethics. (WPTPS, para. 2.1)

These statements were premised on a fundamental re-definition of the role of the state and its relationship to civil society, based on a partnership between them rather than the antagonistic relations that had prevailed in the past. They were also consistent with the relevant provisions of the Interim Constitution (Section 212 (2) (b) and Principle XXX of Schedule 4) as well as Chapter 2 of the White Paper on the Reconstruction and Development Programme (November 1994).

Chapters 3 and 10 of the New Constitution of South Africa (1996) make provision for an integrated, inter-sectoral, and co-operative approach to governance. These provisions commit all three spheres of government (national, provincial and local) to be transparent in policy making and inclusive in its approach. The New Constitution further stipulates that the public administration should adhere to a number of principles including:

A high standard of professional ethics be promoted and maintained;
Services should be provided impartially, fairly, equitably and without bias;
Resources should be utilized efficiently, economically and effectively;
People's needs should be responded to;
The public should be encouraged to participate in policy-making;
Public administration should be accountable, transparent and development-oriented.

Since 1994, the political landscape has been altered, with the introduction of the new central, provincial and local spheres of governments. New national and provincial departments have been established through the amalgamation and restructuring of former apartheid administrations With a few exceptions, most of these have now gone through some form of participatory strategic planning exercise and have formulated their own visions, missions, policy objectives and strategic plans, albeit of varying depth and quality. These have in many cases been made public through the publication of Green or White Papers, provincial Growth and Development Strategies or other policy documents. Greater difficulty has been experienced, however, in securing the necessary buy-in from staff and other stakeholders to ensure effective implementation of such visions and plans.

Three processes appear to have been followed in developing strategic plans, corporate plans or business plans. The first has been an inclusive one, involving the free participation of management and staff, and quite often the involvement of external stakeholders. The level of participation, and enthusiasm on the part of the various constituencies has generally led in such situations to positive outcomes and the broad acceptance of the new mission and vision statements and strategic plans.

The second process has been characterised by the limited or partial involvement of key constituencies. In such cases senior management usually takes the lead, with limited involvement from staff and unions, and typically little involvement from civil society. Such strategic plans are generally met with resistance on the part of those who feel that they have been excluded from the process,

The third process involves those departments and provinces (far fewer in number) that have delayed developing and implementing new strategic plans. A number of reasons are usually given to justify such delays. These include the effects of the "Sunset Clauses" in the Interim Constitution, the time consuming nature of the amalgamation and restructuring of apartheid administrations, delays in the appointment of key personnel, and resistance to change on the part of some senior managers.

2.1.3 The inheritance - challenges and achievements

Our review of the public service has brought home to us vividly how fundamentally flawed was the machinery of government which the first democratic government of South Africa inherited in 1994. This was constructed and managed for the purposes of regulation, control and constraint, and not for those of community empowerment and development. The instruments necessary to begin the process of reconstruction and development simply did not exist. A new machinery and a new culture of governance had therefore to be created. The enormity of this challenge cannot be over-estimated.

Overall, a major achievement has been the re-integration of government, following the country's balkanization under the apartheid system. This involved the complex and difficult task of rationalising and integrating the eleven former administrations of the RSA and the "independent" and "self-governing" homelands into a single unified public service, operating at national and provincial levels. Typically, these various administrations brought with them different accounting and financial systems, different levels of job grading, skills and experience and, in some cases, a different work ethic. The complex nature of this task accounts for many of the problems that continue to afflict the new public service, including corruption and the incompatibility of systems. Considering the abiding self-interest built into these former administrations, the mere achievement of bringing them together is no mean feat. In fact, in regions such as the Eastern Cape and Northern Provinces, many of the persisting problems can be attributed directly to this incorporation process. In the Northern Cape, however, the problems arose differently. Because it was a completely new province, it had no existing public sector infrastructure to draw upon.

Given this situation it was hardly surprising that the new political leadership viewed its inherited public service with a degree of suspicion and scepticism. Nor was it surprising that one of the top priorities for the new Government was the appointment of new senior public servants from within its loyal political ranks. The Commission acknowledges that there was a threat, real or perceived, of political sabotage by intractable incumbents of the previous dispensation. We also acknowledge the need for "political appointments" within the service as a cushion against unsupportive public servants. It has become evident to the Commission, however, that some of those new appointees have not been able to offer much beyond political loyalty, due to the lack of skills. We were also concerned that, in general, senior public service appointments have generally reflected the ethnic or racial composition of the Minister. While we understand the rationale for political appointments into the public service, we feel that this should be an interim and not permanent feature of the service, and wish to emphasise that skill and competence, rather than political loyalty, should be the guiding norm in future, especially as the threat of political sabotage diminishes.

As can be expected, a number of new ministers and senior public officials assumed office without any previous experience or, in some cases, formal training. Often they walked into ill-equipped offices without any "phasing in" or formal hand-over from their predecessors. This, combined with a general distrust of public servants from the previous order, could only exacerbate the existing sense of insecurity and incapacitation. Compounding this was lack of clarity of roles between elected and appointed officials, a recurrent problem in both national and provincial departments.

From the standpoint of the citizen, the result has been a growing gulf between popular aspirations and expectations on the one hand, and government performance on the other. To some extent this was inevitable given the magnitude of the problems inherited from the past and the lack of resources for overcoming them.

The so-called "Sunset Clauses"(in particular Paras 236/7/8 of the Constitution of the Republic of South Africa 1993) were an additional constraint on transformation, forcing the state to carry many senior civil servants who were anxious, de-motivated and, in some instances, hostile. These sections continue in force in the 1996 Constitution (Schedule 6 para 24 sub-sections 1/2/3 ) unless they are amended, repealed or inconsistent with the new Constitution. Nor are any proclamations issued under these sections affected unless they are likewise amended, repealed or inconsistent.

Recent legislation driven by the Department of the Public Service and Administration (DPSA), and in particular The Public Service Laws Amendment Act 1997, has made it easier in theory for the Government to dismiss incompetent or non-performing officials. But in practice the disciplinary and dismissal process remains slow. The situation is further compounded by the large numbers of supernumerary personnel retained within the public service, as well as by the weaknesses of the Voluntary Severance Package (VSP) scheme. As will be seen later in this report, the operation of the VSP scheme has resulted, somewhat perversely in many cases, in the loss of competent staff and the retention of the "dead-wood."

Given this background, the Commission concludes that what is remarkable is not that there are short-comings in the governance system but rather that it has managed "to stay afloat." We must record how impressed we have been by the progress already made in response to the challenge posed by the flawed inheritance from the previous regime. The magnitude of the task is self-evident. Yet already under the Interim and the new Constitution, a new state has been created with democratic and accountable institutions. A national public service has been and is being re-engineered and re-motivated out of the miscellany of cadres serving the old regime. Its personnel have been integrated into new structures serving national and provincial government that have become remarkably more representative in a relatively short space of time. The aims and objectives of government are being made manifest in a steady flow of policy developments, set out in consultative Green and White Papers. In general, state departments appear strong on policy but weak on delivery. A start, albeit slow and hesitant, has nevertheless been made in giving effect to new policies across the whole spectrum of government.

Despite such achievements, we nevertheless tend to focus in this report, as is our duty, on the deficiencies and short-comings in the public service and the machinery of government. In this respect, it is our view that the system of governance in the new Republic of South Africa is in a number of crucial respects not working well at this stage of the transition process. Too little progress has been made in remedying the inequalities and inefficiencies of the past. The delivery of public services, their costs and quality, leave much to be desired.

We shall in succeeding chapters specify the major weaknesses which our investigations and studies have revealed and make proposals in this regard so that the public service at all levels, we believe, will be able to perform better than it does now.

We doubt if our findings will come as a surprise to those working in government. Many of the issues and recommendations in this report were in fact identified and suggested by public servants interviewed by the Commission, many of whom are themselves labouring under the burden of making the best they can of the existing structures and systems and the shortage of necessary skills. We wish to begin our report by acknowledging the commitment, energy and enterprise which many ministers, MECs and public servants are bringing to their work, and to commend them accordingly. We believe they will welcome the opportunities for betterment in the performance of the public service which our proposals are intended to achieve.

However, the evidence collected in our review (from hearings, submissions, specialist studies, process studies, as well as evidence from the Provincial Reviews undertaken by the DPSA) amply and powerfully demonstrates that the machinery of government is in many ways not working as effectively as it could and should, even within the constraints now obtaining.

What follows summarises our overall impression of how government is working. This is preceded by some assumptions about our point of departure.

2.1.4 Assumptions and strategic framework

The Commission is aware of the difficulties arising from the assessment of a public service in transition. It is common knowledge that the measures, strategies and institutions required for transition need not be the same as those required for longer-term consolidation. In fact, in some cases such transitional measures could frustrate the longer-term goals of the public service.

The Commission is mindful of this dilemma and has tried as much as it could to distinguish between short, medium and long-term recommendations. Even then, we caution against inflexibility. We have considered carefully each and every recommendation and are confident that they form a sound basis for a solid public sector.

We have decided at the outset that we would not be evaluating the substance of government policy, as this clearly fell outside our terms of reference, but have noted the absence of policy where this has impinged on service delivery. The only exception in this regard is that of the Department of Public Service and Administration (DPSA) whose substance and policy constitute the focus of our investigation. Even with this caution at the back of our minds, we had to confront initially what amounts to a policy question, namely: What Ought the Public Service to Be Doing?

In trying to get to grips with this question we needed to go beyond the platitude that the purpose of the public service is to serve the government of the day. This is true but hardly helpful. We felt that it was impossible to continue this process unless we agreed, however tentatively, on some common understanding of how the state sees its role. Our approach was to refrain from defining these parameters in the abstract, but rather focus on how the current state defines its role. We considered and debated the following options which are well amplified in the Constitution:

The state as a creator of the conditions necessary to reach national goals;
The state as a facilitator;
The state as a nation-builder;
The state as a provider of the socio-economic environment.

Given the significance of the Government's Macro-Economic Strategy for Growth, Employment and Redistribution (GEAR) we felt that it was useful to see how the state was defined in that policy document, notwithstanding the many reservations that were aired about it before the Commission. In GEAR the state is primarily perceived as a facilitator that creates the conditions within which civil society acts. In particular, GEAR's objectives were to:

Reconstruct the economy and orientate it further towards the export sector;
Reduce poverty;
Promote a higher level of economic growth which leads to a sufficient number of new jobs to reduce unemployment;
Set limits on future government expenditure in order to meet internationally acceptable norms regarding the budget deficit as a percentage of GDP.

The authors of the GEAR document stressed that the new macro-economic strategy was and should continue to be consistent with the principles of the RDP. Whilst acknowledging that the degree of compatibility between GEAR and the RDP has become a subject of heated debate in South Africa, the Commission itself believes that the government should continue to strive to realise the broad principles of the RDP, particularly in relation to the introduction of an integrated, programmatic, needs-based, results-oriented and people-centred approach to service delivery.

The last objective of GEAR listed above, combined with a realistic suite of economic scenarios for South Africa in the medium term, has important financial implications for government. These objectives set clear limits on government spending and size. This leaves government with very little leverage, especially with salaries currently constituting a major part of the current expenditure of the consolidated national and provincial budgets. The picture is uneven. On average, however, according to figures supplied by the Department of State Expenditure (DoSE), remuneration constituted 39.1% of these budgets in 1994-95, 36.2% in 1995-96, 38.2% in 1996-97 and 39% in 1997-98. These percentage figures would be higher if other contractual payments were included.

The high levels of expenditure on public sector remuneration, calculated at R70 billion per annum, is in part due to the development of nine provincial public service administrations as required by the Constitution, as well as the retention of staff inherited from the former Bantustan bureaucracies, particularly in the Eastern Cape and Northern Province. One of the consequences is a very high number of "supernumeraries," calculated currently at 54,000 (DPSA Survey, April 1997).

The salary situation is also confused. On the one hand, departments constantly refer to their failure to attract high calibre people because of poor salaries. Yet, ironically, salaries constitute a high and ever growing aspect of the budget. High public sector employment, especially at lower skill levels, and the lack of a workable mechanism for retrenchment and redeployment of staff, makes it exceedingly difficult to keep within budgetary constraints on the wage bill. While public service salaries appear to be reasonably competitive with the private sector both at the top and at the bottom of the salary scale, the lack of competitive advantage is evident in technical and specialist positions, for instance for engineers, doctors, lawyers, finance and IT personnel. In these areas it is very difficult to recruit and retain capable staff.

The case for careful prioritisation, information management and cost effective systems with fewer staff is therefore evident. The Government will have to prioritise delivery programmes accordingly.

Already salaries are rising as a proportion of departmental budgets which have been centrally capped. This in turn impinges on other essential expenditure. Moreover, it will be difficult for government to raise tax rates any further to improve tax receipts if the country is not to exceed internationally competitive levels of tax. Obviously, more effective systems of tax collection are important but the constraints on spending will remain. The main conclusion is that prioritisation will continue to be a key component of good governance. This implies the careful selection of priorities or " trade-offs," a process which is hard to implement in a democratic society where everyone wants his/her expectations to be fulfilled. The number of state employees will have to be limited if the civil service is to be seen as a good, motivational employer. Our views on the size of the public service are elaborated in greater detail in the section on rightsizing (Section 3.2) in Chapter 3 of this report.

International norms for government employment as a share of population for upper-middle level countries such as South Africa would require the reduction of approximately 320,000 public service personnel, at an estimated cost to the fiscus of approximately R16 billion per annum over the next three years. Into this three-year total of R48 billion would have to be factored the cost of training of such employees for employment in other sectors of the economy or self employment. Apart from the additional social costs of such an operation (including their effects on unemployment), the Commission believes that these financial costs are unaffordable. It is also dangerous to accept international norms at face value in view of disparities in the description of employees described as public servants.

Whilst the Commission accepts, therefore, that there is an urgent need for rightsizing in the public sector, located within the macro-economic constraints established by GEAR, we feel that this should nevertheless be driven primarily by the need to improve the efficiency and effectiveness of service delivery. For this to take place, however, there will need to be organisational audits in each department, together with organisational redesign to determine optimal staff compliments. Heads of departments would have to use staff more productively, prioritise delivery programmes and produce a hierarchy of needs to effect an appropriate annual reduction of personnel over the next three years, commencing with the retrenchment of those supernumerary personnel who cannot usefully be redeployed or absorbed in the staffing establishment.

In addition, the Commission recommends that:

Any rightsizing initiative will need to be costed and the costing process will need to take alternative service delivery options (for example, outsourcing) into consideration;
Such initiatives will need to be fully consultative to ensure the necessary buy-in from the unions and the public;
Rightsizing will also need to be accompanied by programmes to create alternative employment opportunities; if not, it will prove to be highly controversial politically;
Government must seriously rethink the voluntary severance package scheme, the current moratorium on compulsory retrenchments, and related legislation (the Labour Relations Act) in particular);
Severance packages should no longer be "voluntary";
Political and administrative heads need to be fully briefed about the conditions governing severance packages.

The view that the state is responsible for the provision of services is, as far as the Commission is concerned, self-evident. This does not mean, however, that the state has to undertake the actual provision. What is required, in the view of the Commission is a relatively small but highly motivated, focused and well-paid public service This can only happen if core functions are clarified and if public servants adhere strictly to the public service Code of Conduct. In addition, the Government will need to seriously consider alternative service routes and outsourcing to other providers, particularly through creative and innovative partnerships with the private and community sectors.

In the light of this conception of the state, the question of what the public service ought to do would largely be shaped by three considerations:

Social need within the parameters of both cost and capacity;
The capacity of different agencies (national, provincial and local governments; private sector and non-governmental organisations);
The cost of state activities.

In the light of the above, it is important to try and specify the specific yardsticks against which government performance should be measured. Or, in other words, what should a professional civil service look like?

2.1.5 A Professional Public Service

2.1.5.1 Promoting Leadership in Government

A professional public service requires professional leadership. International experience suggests that the senior official or officials responsible for exercising this leadership function should be located within the Office of the President, with the necessary management support. It would then be the responsibility of the designated officer (who could and perhaps should also be designated as Head of the Public Service) to promote the continuing development of the senior professional cadre. Regular meetings of this cadre will encourage and facilitate effective coordination of government policy.

As the DPSA is currently playing an important role in trying to exercise this leadership-function, it is recommended that this department be reconstituted as an Office of Public Management, located in the Office of the President (see Sections 2.3.1 and 2.5.4 below).

2.1.5.2 Creating a Professional Service Ethos

This is one of the nine enabling objectives for a democratic and efficient public administration set out in the Constitution. As such it is of considerable strategic importance for the enhancement of the Government's capability, and should be fully understood.

The concept is that at the highest levels of the public service (Director General, Deputy Director General, and Chief Director) the professional skills required are qualitatively different (though not necessarily more important) from those required at lower levels. At the lower levels, skills and experience necessarily relate to the specific responsibilities of each line department. At the higher levels these technically related skills become progressively less dominant. They are displaced by more generic and transversal skills and competencies, related in particular to the formulation of policy, the development and management of strategic vision and plans, the management of human and other resources, the coordination of policies across government, handling public relations and the media, and the management of the often sensitive interface between appointed and elected officials. Thus, the skills base for top management runs across the whole of government. The incumbents of these posts have the responsibility to pass on these skills to the management cadre and potential cadres below them.

This development is now widely recognised, particularly in Commonwealth countries such as New Zealand, Australia, the UK, Canada and Malaysia where the top cadre has been designated as a distinct component of the public service, the Senior Executive Service. The number of grades in this top echelon varies from country to country. In the UK it comprises Grade 5 (Assistant Secretary) to Grade 1 (Permanent Secretary). No such gradings are suggested in this report, however.

It has also been recognised in such countries that those officers already in or about to enter the senior management cadre will benefit from training to develop the capacities they will increasingly need to exercise. Such training is often given in collaboration with the private sector, as in the UK "Top Management Programme." It naturally follows that a senior management cadre so created will take on a distinctive professional ethos, incorporating all the values appropriate to a public service at any level plus the values and standards appropriate at these highest levels of activity. This ethos will, of course, condition the development training programme .

Three supporting structural developments will be important to foster such a professional service ethos in the South African context. Firstly, regular meetings of the senior cadre will be necessary to encourage and facilitate better coordinated programmes of government policy. Secondly, efficient management support will be necessary to facilitate the continuing development and renewal of the cadre within the recommended Office of Public Management, to be located within the Office of the President. Thirdly, structures and processes will need to be put into place to ensure that the ethos created within the senior cadre is successfully cascaded down to other levels of the service.

2.1.5.3 Setting the Standards of Public Service Performance

Current standards of service delivery satisfy neither the public nor the officials who aspire to serve them. This is hardly surprising, given the problems faced by the new Government when it took office in 1994. But the Commission believes that improvement, even dramatic improvement, is possible. This, we suggest, imposes two tasks on the Office of the President. The first is to initiate and sustain a national programme of public service standards, however modest. This would be a public declaration of what citizens could and should expect from service delivery. Such service standards would need to be put forward by line ministries and departments, in consultation with their provincial counterparts. The second is to institute a system of rewards for outstanding service delivery and the achievement of designated standards. Whilst the additional costs of such a process would most likely be very small, the potential benefits can hardly be over-stated, as is shown by the widespread international experience.

2.1.5.4 Eliminating Corruption

In moving towards a more professional ethos in the South African public service, it will be necessary to eliminate the corruption and fraud which unfortunately is still widespread in parts of the service. Whilst it was not part of the PRC's brief to investigate corruption, we were naturally concerned at the instances of fraud, mismanagement, abuse of authority, and lack of accountability when these were revealed to us. In different parts of this report we therefore make recommendations, inter alia, for strengthening accountability, introducing more effective and prompt control and disciplinary systems, providing incentives for exemplary behaviour, and introducing training courses in public service ethics.

2.1.6 The Political-Administrative Interface

A weakness in our present system of governance is the uncertainty, even confusion, as to the relative responsibilities of ministers and MECs on the one hand, and senior officials on the other. This became very clear in much of the evidence presented before the Commission. If ministers and MECs act as managers, involving themselves in details of administration, and if senior officials act as politicians, involving themselves in political processes outside their departments, this is to the detriment of their proper and necessary roles. Within the governance of the modern democratic state there is need for both elected and appointed officials with distinct but complementary roles. There is a wealth of international experience, in a variety of differing constitutional contexts, which points to the need for a clear definition of these roles.

Elected officials, such as ministers and MECs, should bring the following to their offices:

Authority endorsed by the democratic process;
Skills of political leadership in determining and promoting policies to meet the needs of society;
The obligation to consult with the President/provincial premiers and colleagues for the policies pursued and the decisions taken by their Departments;
The ultimate responsibility to account to the President/provincial premiers, to the National Parliament/provincial legislatures, and to the public for what has been done or not done by government.

Appointed officials, in contrast, should bring to their offices:

The proven ability, knowledge and experience required to carry out the tasks of government in the field to which they are assigned;
The status derived from having been appointed on merit rather than through patronage;
The obligation to put their ability, knowledge and experience to work in support of the minister/MEC;
The responsibility to account, either directly or through senior officers, to the relevant minister/MEC, to parliament or the provincial legislature as required, and to the public for the performance of their departments.

These roles of elected and appointed officials thus require different but complementary skills which must be combined for effective governance. Elected officials needs skills in political debate and public presentation, and in translating popular concerns into deliverable policies, for example. These are not likely to be shared by the public service officials working for them. At the same time, appointed officials need professional and technical skills in financial and general management, which similarly are not likely to be shared by their ministers and MECs.

International best practice suggests that the following are the key roles of elected and appointed officials respectively:

The Role of Elected Officials should be:

To provide vision and policy direction;
To oversee and monitor the implementation of policy;
To secure from colleagues support in the form of necessary resources for their ministries and departments to effectively carry out policy;
To represent the ministry in cabinet and parliament or, the case of MECs, to represent the provincial department in the provincial executive council (EXCO) and legislature;
To account publicly for the performance of the ministry;
To take collective responsibility for cabinet decisions;
To be accountable to the legislature for their actions.

The Role of Appointed Officials should be:

To inform and advise elected officials accurately, completely and on time;
To implement policy and ministerial decisions efficiently and effectively, and in particular in ways which provide value for money;
To be fully accountable to ministers/MECs and, where appropriate, parliament;
To utilise in the carrying out of these functions all relevant sources of data and advice, whether within or without the machinery of governance, so as to give their ministers/MECs the broadest possible basis for policy consideration and determination.
To co-ordinate, control, manage and communicate within their departments.

Given the difficult and complex nature of the transition in South Africa, it is remarkable and noteworthy that substantial, and in many respects successful, progress has been make towards these ends. But we are not there yet. We therefore believe it is important that authoritative guidance on the roles and relationships of political and administrative persons be issued by the President and endorsed by parliament as a foundation for the future governance of South Africa.

There is therefore a crucial need for government to develop and affirm a Professional Protocol specifying broad guidelines to facilitate more appropriate management of the relationship, roles and responsibilities of elected officials and public servants.

There is also a need to ensure a common understanding among ministers, deputies, MEC's and appointed officials of the machinery, systems, principles and practices of government and administration. This is to increase knowledge and skills but also to avoid conflicts inherent in the political-administrative interface. Such measures are also necessary to underpin the investment in the long-term development of a professional managerial corps throughout the public service.

We see the Code of Conduct already published by the Public Service Commission as a valuable contribution towards meeting this requirement. But the purpose and aims of the code cannot be fully met by promulgating it in the President's name. Guidance and support will be necessary for both elected and appointed officials, if the code is to become a living reality.

2.1.7 The Objectives of Reform

It is essential to recognise that the reform and continuous development of governance in South Africa has to begin at the centre of government itself and will need to embrace the totality of government structures, from the Presidency and Cabinet to ministries, departments and provinces.

The objectives of reform can be plainly set out. Government must be able:

To formulate policies which are well-founded on relevant data, coherent and well coordinated, fully and prudently costed to ensure value for money, and prioritized within available resources;
To facilitate the efficient and effective implementation of such policies, and to ensure that they are regularly monitored and reviewed.

In our judgement, these objectives cannot be fully realised without significant change at the apex and core of government. National departments and provincial administrations will not be able to achieve these objectives if they continue to function as at present. By themselves they do not have the capability or authority to remedy the way government works.

From our international specialist studies we observed that the Government has four main instruments at its disposal to pursue its objectives effectively. These are:

The structures of the Government (including ministries and departments, organisational components, associated executive and/or advisory agencies, commissions, and the like);
The personnel employed in government, or attached to in an advisory or consultative role (for example, from the private sector, non-governmental organisations, civics and trade unions);
The financial and physical resources of government (including its revenues, and capital assets of land, buildings, equipment and so on);
The information base of government (the national statistical data and the operational data relating to resources, personnel and performance in service delivery without which government cannot effectively operate).

The Commission has addressed each of these instruments separately in our review. Our detailed findings and recommendations, derived from our consideration of these four issues, are set out in chapters 3-6 of this report.

But in some ways these are all secondary to what we see as the key strategic issue arising from ourreview, namely the performance and capability in the direction and management of these four instruments at the apex and core of the National Government.

Following a general overview and assessment of the structural and functional challenges that have faced the process of building a professional public service in South Africa, we will look in this overview at the main government structures and how they are working.

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2.2 Overview and assessment of the reform process

The wholeness of government is weakened, indeed threatened in South Africa by both structural and functional defects. Structurally, the national machinery is too fragmented. There are too many departments with too narrow a focus. The whole machine is headed by too many ministers supported by too many private offices, directors general and their support staff. This in turn has created major problems of coordination. In addition every separate department is potentially another self-regarding vehicle for thrusting policies at provincial and local government.

Functionally, there exists what many have described to us as a vacuum at the centre of government. Somewhere between the offices of the President and Deputy President, and between these and the departments lies a space which is conventionally filled in virtually all systems of government by a central secretariat or cabinet office. The function of such an office is to ensure that issues and policies requiring consideration by the President, Deputy President and Cabinet are identified, that the ground work for their presentation is thoroughly prepared with all the relevant departments involved, that there is comprehensive and comprehensible briefing, that policies and outcomes are properly and promptly secured and recorded, that implementation follows, and that progress is effectively monitored.

Such a cabinet office does not exist in South Africa, and there is no doubt that this is one of the most urgent issues requiring remedial attention.

Some of the other main problems and challenges revealed by the PRC's investigations to have beset the reform process are highlighted briefly below.

2.2.1 Lack of Clear Vision and Strategic Direction

Three years after the political settlement in South Africa, and despite the national vision contained in the WPTPS, there seems to be a lack of consensus on a common and shared vision. Instead a plethora of visions have been developed by departments and provinces, often quite different from each other in content, context and direction. Variations in vision statements appear to have been inspired by different interpretations of the New Constitution, the RDP, the WPTPS, and more recently GEAR. Similarly, whilst most departments and provinces have embarked upon some form of strategic planning, there have been significant variations in how such plans have been developed, the degree of participation and buy-in by staff and external stakeholders, and the ways in which the policy outcomes have been implemented and evaluated.

2.2.2 Lack of Vision-Building and Strategic Planning

Vision building and strategic planning has also been adversely affected in some departments and provinces by the lack of clarity in the respective roles and responsibilities of:

National departments and their provincial counterparts (with a number of provincial departments claiming that their national counterparts had done little to build their capacity);
Political leaders and senior administrators (with a number of senior officials complaining about inappropriate political interference);
Provincial Directors-General and their political heads on the one hand, and provincial departmental heads on the other.

2.2.3 Lack of Skills and Capacity

In many strategic planning processes, much of the work has been facilitated by outside consultants, with little evidence of any significant skills transfer to staff within the organisations. With a few exceptions, therefore, it does not seem that strategic planning processes have made a major contribution to the building of public sector capacity. Within the public sector, there is also little agreement as to where the strategic planning functions should be placed. Although some departments have established inclusive and participative transformation units, others have not. There is little doubt that the lack of in-house expertise and capacity has hindered the process of setting new goals and priorities. Another factor is the degree of "new blood" that has been brought into senior positions within departments and provincial administrations. Where there has been significant change in this respect, new ideas tend to have been generated at a faster pace. However, the relative inexperience of many "newcomers" in the formal and informal ground-rules of the organisation has in some cases meant that they have struggled to win broader acceptance for these ideas.

2.2.4 The Lack of Effective Organisational Arrangements

A number of departments and more particularly provinces have not as yet designed new and more effective structures in line with their new vision, strategies and functions. This has been especially evident in those provinces that have had to go through the difficult and time-consuming exercise of amalgamating and integrating a number of former apartheid administrations. Such provinces have clearly become overwhelmed in the rationalisation process, to the detriment of other forms of structural innovation and improvements in service delivery.

2.2.5 Lack of An Appropriate Communication Strategy

In many departments and provinces the lack of ability to communicate internally and with clients has severely affected efficiency. There are reports that cabinet decisions are not always adequately communicated to Heads of Departments. In addition, strategic plans, vision and mission statements, together with strategic objectives and goals, are frequently not adequately communicated to key stakeholders. This has often led to confusion and the stifling of opportunities for mutually beneficial inter-sectoral collaboration.

2.2.6 Lack of Coordination

Effective coordination within and between the spheres of government is clearly vital, especially if the public service is to contribute meaningfully to the kind of integrated approach to reconstruction and development advocated in the RDP, WPTPS and other policy papers, as well as to the system of co-operative governance spelled out in the 1996 Constitution. However, virtually all of the studies initiated by the Commission pointed to serious weaknesses in the current structures and mechanisms for coordination, both within departments and provinces and between the different spheres of government. The lack of effective coordination mechanisms was also highlighted as a major problem by most departments and provinces who made presentations before the Commission.

2.2.7 Lack of Effective Monitoring and Evaluation Mechanisms

Present institutional arrangements within government also lack monitoring and evaluation systems to measure performance and evaluate policy outcomes. Annual reports, which national and provincial departments prepare, are largely dry, skeletal and not always helpful. These largely fail objectively to outline successes and failures of the previous year. In addition, they are not flexible enough to give immediate feedback to policy makers and implementers.

2.2.8 Conclusions and Recommendations

From this brief overview of the transformation process, the Commission believes that there is an urgent need, inter alia, for:

A clear and commonly accepted national vision, elements of which can be found in a range of policy documents from the RDP to GEAR.
Clear and unequivocal commitment to change, particularly on the part of political leaders and senior public service managers.
Institutional re-engineering, to cluster and re-configure a number of government departments, as well as to foster multi-disciplinary and multi-sectoral approaches to reconstruction and nation building, to develop innovative horizontal coordinating mechanisms, and to simplify current government bureaucratic procedures.
Mechanisms to review legislation, in particular to ensure compliance with the New Constitution.
An effective communication strategy, to ensure that every structure of government has built-in mechanisms for effective communication, vertical and horizontal as well as internal and external.
Improved systems of human resources development, to build the skills and capacity required by the new public service in South Africa.
Effective forms of inter-sectoral coordination, both vertical and horizontal, to foster better integration in policy-making, goal setting, and the implementation and monitoring of programmes and projects.
Improved systems of monitoring and evaluation, in order to ensure efficiency and effectiveness within government, and objectivity in measuring policy outcomes.
Improved opportunities for participation by staff and customers-citizens, which will be vital, in the Commission's opinion, to secure the necessary levels of ownership and support for the change process.

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2.3 The Presidency and Cabinet

2.3.1 The Office of the President

"What is the role of the President's Office in the initiation, formulation and coordination of policy, what is the filtering down process of policy from cabinet to departments, how is the work of Directors General coordinated and by whom? It does seem Chairperson from the questions posed as well as other signs that we, who in a sense are working at the centre of government, pick up that there is a concern at times even a pre-occupation with what is described as coordination of government or actually lack of coordination of government." (Statement made by Professor Jakes Gerwel, Director General, Office of the President, before the PRC, 25.09.97).

"There is a problem in so far as the coordination of the policy. We inherited a Cabinet Secretary from the old Apartheid Regime. Literally Comrade Mandela just went into the same office that Mr. De Klerk, Mr. Botha and their predecessors had previously occupied. There were no changes whatsoever - completely none. The only thing that really happened there is that the office was divided into three -- one for Mandela, the other for De Klerk and the third for Mbeki...De Klerk's office was better resourced than the others in so far as personnel and everything was concerned. The office of Mandela is the smallest office of a President I've ever seen in my life up. That of Mbeki was about the same, with the most senior public servant there being a Chief Director. There was nobody really politically responsible for running the administration of the Presidency, due specifically to the nature in general of the Government of National Unity. There was also nobody senior enough to take decisions there on the questions of administration in general." (Statement made by Dr Zola Skweyiya, Minister for the Public Service and Administration, before the PRC, 07.11.97).

These statements reflect the Commission's concerns regarding the management of the Office of the President, as well as the relationship between the offices of the President and Deputy President. A substantial number of directors-general and some ministers have intimated to the PRC that, rather than being the source of administrative support and locus of effective coordination, the Presidency has occasioned a tremendous amount of frustration. With respect to the relationship between the Offices of the President and Deputy President, the Commission was concerned about what we saw as a potential overlapping of support structures and functions, especially in the context where the distribution of powers and functions between the two offices appear to be ambiguous, and where there are two DGs, two legal advisers and other parallel structures with little relationship to each other and which are potentially conflicting.

The submission of the Office of the President to the Commission suggested that the nature of this office was not only characterised by the core requirements of the public service but also reflected the personality of the current incumbent. From the point of view of the Commission, this was by no means exceptional in international experience and may well have been necessary in South Africa in the exigencies of the 1994 transition. The Commission, however, in considering the long-term future of the office, adopted a more structural approach to the matter. Its recommendations on the offices of the President and the Deputy President and its approach to the re-configuration of ministries and departments (which will be discussed in a later section of this overview) are therefore based on efficacy, function and economies of time and cost.

In the light of the above, it became clear to the Commission that the transformation and development of the governance of South Africa requires a radical re-appraisal of the functions, structures, personnel and management of the Office of President.

As indicated above, this should be the core and apex of the whole system of governance in South Africa. But currently it is not providing the necessary support required for the Head of State or for the effective running of government as a whole. The evidence before the Commission left us in no doubt but that the current process of policy formulation and decision taking by the Cabinet and ministers is unsatisfactory. Ministers collectively are not as well served as they should be in this respect. Their decisions are often taken without effective coordination, both laterally across departments, and vertically between national departments and their provincial counterparts. Many of the other changes recommended in this report will not be effectively implemented, we believe, if these questions surrounding the role of the Offices of the President and Deputy President are not first resolved.

In South Africa, the Office of President has to support and service two distinct functions:

The role of Head of State, with a heavy international and diplomatic workload as well as the role of representative of the nation;
The role of Head of Government, with a heavy workload overseeing the functioning of government as a whole, presiding over cabinet, and participating actively in the whole range of national, provincial and local affairs.

The Commission identified a number of roles and responsibilities which we believe should be contained within the Office of the President. In many countries these roles are separated, each served by its own dedicated structures and personnel, though necessarily closely linked. The work-load is not significantly reduced if they are combined, and each still requires its distinctive support.

We therefore see the need for four separate entities to be identified in the Office to the President:

The Private Office, whose role would be to meet the day-to-day requirements of the President, in terms of diary management, incoming and out going correspondence, briefing for engagements both internationally and domestically, record-keeping with regard to meetings and all necessary follow-up action, parliamentary affairs, political liaison and consultation, and transportation and related logistical requirements.

Office of the Cabinet Secretariat (OCS). The role of the OCS would be to support and service meetings of cabinet ministers whether under the chairmanship of the President or Deputy President or any other minister. This function would also cover meetings of the President and/or ministers with provincial premiers and parliamentary portfolio committees, as well as international ministerial meetings. It would be the function of this office:
- To determine for ministers the arrangements and agenda for cabinet, cabinet committees and other ministerial meetings;
- To commission and present briefing memoranda;
- To maintain records of all meetings; and most importantly, To secure from ministers and departments the required follow-up action.

The OCS would also be expected to play an important role in inter-departmental and inter-governmental coordination. As such it would need to liaise effectively with a number of special strategic inter-departmental planning, priority determination, programming and budgeting units, as well as with the Inter-Governmental Forum and MINMECs. In particular the OCS would be expected to play a key role in overall policy coordination and planning, especially though not exclusively in the budgetary and financial fields. This would involve regular liaison with the Departments of Finance and State Expenditure. It will be the function of the OCS to ensure that departments consult with it and appropriate role players in respect of policy and draft legislation. This will avoid the tabling of contradictory or inconsistent cabinet memoranda, and enable the OCS to identify timeously any possible unintended consequences of draft legislation and policy.

The work of the OCS would be directed and coordinated by the Head of the Public Service, whose salary and conditions of service would be separately negotiated. This is a new post proposed by the Commission. The person appointed to this post would need to be a strategic thinker, capable of driving the process of transformation and ensuring the effective coordination of government policy on behalf of cabinet.

In addition to the Cabinet Secretariat, there are two central ministries which support the President and the Cabinet in the whole range of governance, namely the Ministry of Finance and the proposed Office of Public Management (see below). Besides these central agencies there will also be the required cabinet committees, supported by the relevant committee of the Cabinet Secretariat, headed by the Cabinet Secretary, reporting directly to the President.

The Office of Public Management (OPM), which would replace the DPSA as it is currently constituted. The role of the OPM will be to discharge the responsibility of the President for the efficient and effective coordination and direction of public service. The OPM will consist of a number of specialised strategic support units that would take responsibility, inter alia, for HR practices, personnel, affirmative action and employment equity, industrial relations, policy formation, planning and general oversight of the service. The OPM will also provide support to the Cabinet Secretariat for purposes of the coordinated implementation of government policies. Two important units currently in the Office of the Deputy President (the Office on the Status of Women and the Office on the Status of Disabled Persons) will formally be located as chief directorates within the OPM. This will enable them to promote and integrate their respective projects more effectively and with more clout than is currently the case. A new unit entitled the Organisational Review Agency will similarly be located in the OPM. Its functions are elaborated in Section 2.5.7.8 below. The direction and oversight of the OPM would be the responsibility of a minister, as this would facilitate the necessary separation of the President from the day-to-day oversight of the OPM.

The Office of the Public Service Commission (OPSC), which would replace the Public Service Commission as it is currently structured by the 1996 Constitution. The OPSC, we recommend, should be a lean, independent, statutory commission consisting of 3 senior, experienced managers (drawn from the public and private sectors) to monitor, inspect, review, and assess the performance of the public service and to make recommendations and advise the President and Parliament and, where appropriate, the provincial premiers and legislatures. The OPSC should have a small but expert support service for this purpose, as indicated in more detail in Section 2.5.5 below.

Clearly, all the four units above would need to work co-operatively together on a day-to-day basis.

In recommending the above, we have not distinguished here between the roles of the President and Deputy President, since the allocation of duties will be determined between them. It would, however, be necessary in any arrangement for the Deputy President to have comparable private office support. Nor have we set out an elaborate organogram with numbers and grades of the senior posts required to support the Office of the President in this way. Such details would need to be researched and planned at greater length. We are of the view, however, that there would be no significant increase in costs as a consequence of these recommendations, and probably a saving resulting from the proposed restructuring of the DPSA and the PSC.

The Commission believes that the Office of the President, in line with its constitutional mandate, should take up its responsibilities for the more effective coordination of cabinet and government as a whole, including monitoring and following-up its decisions.

In the view of the Commission, the idea needs to be re-inforced that the public service is essentially a unitary entity, operating at both national and provincial levels. Accordingly, the Office of the President should be restructured to avoid overlap and potential conflict. In our view, there should be one DG for the offices of the President and Deputy President combined, and a smaller office for the Deputy President. We recommend in particular that machinery is put into motion to assess whether or not current senior personnel in the Presidency have been appropriately deployed and that, where necessary, appropriate corrective measures for the deployment and re-deployment of staff be adopted as a matter of urgency.

If, within the Presidency, letters are not answered or even acknowledged, and if priorities of policy and programme cannot be judged independently or effectively coordinated, not only is the Head of the State and Government let down, but a signal is being sent throughout government. Our proposals for strengthening the Office of the President, along the lines set out above, should help to enhance the prestige of the presidency abroad, the cohesion of the country internally, as well as the image of the President generally. The core function of the office, in the view of the Commission, will be to render effective support to the President and Cabinet so that they can take informed decisions that can filter down timeously to the relevant organs of government through effective and professionally managed structures.

It should be clearly understood, however that we make no case for extravagance or self- indulgence in strengthening these offices, but for the deployment of administrative discipline and professional skills so that, qualitatively, they can perform and be seen to perform to the highest standards, and set a benchmark of quality in governance overall. To this end, it will be necessary to define the responsibilities which these offices have to undertake. For this purpose, we regard the Office of the President and the Office of the Deputy President as one. The distribution of duties between them will be largely determined by their personal relationship and the circumstances at any particular time, although each of them will of course need a private office.

In the view of the Commission the support system for these responsibilities is not adequate and the organisation and design of the Office of the President is in need of strengthening. Existing structures are currently deliberately lean "to reflect the nature and style of the incumbent." There is no guarantee that without formal structures to facilitate, monitor, communicate and co-ordinate policy in the future, that these will be effective. At the very least, systems need to be institutionalised and standardised.

2.3.2 A Central Cabinet Secretariat

From the above it is clear that the Commission believes strongly that the Cabinet could and should be involved much more deeply in policy formulation and coordination across government as a whole. In particular it should facilitate closer collaboration between the relevant ministerial sectors, between national and provincial spheres of government, and between these sectors and spheres and the key central ministries of Finance, State Expenditure and (as currently constituted) Public Service and Administration.

This in turn requires in our view a strong and effective Central Secretariat equipped with personnel of the highest calibre and with appropriate professional skills. Such a secretariat should not confine its functions to running the private offices of the President and Deputy President, but should play a key role, together with the proposed Office for Public Management, in ensuring clearer direction and more effective coordination at the apex of government, as well as thoughout the public service as a whole.

Our proposals for a Central Cabinet Secretariat and Office of Public Management would, we believe, substantially strengthen the apex and core of the National Government. We have not, however, thought it right to go into the detail of how the Office of the President, enhanced as we suggest, should be organized. Decisions of principle would need to be taken on our recommendations and only in the light of those decisions would it be practicable to draw up an organization chart and write the job descriptions for the posts that would need to be filled for adequate reform.

2.3.3 The Office of the Deputy President (ODP)

The constitutional provision for the Office of the Deputy President (ODP) in the 1993 Constitution was unchartered territory for the post-apartheid state. The Interim Constitution allowed for two such deputies with delegated powers from the President. The 1996 Constitution is silent on the precise role, functions, staffing and structure of the ODP except in so far as it requires the President until April 30 1999 to consult with him/her in respect of the development and execution of policies of the National Government, including all matters relating to the management of the Cabinet and the performance of cabinet business as well as certain appointments under the Constitution (See Note to Section 84 of the Constitution of the Republic of South Africa, Act 108, 1996).

The precise structure and functions of the ODP would therefore appear to revolve around its responsibility to assist the President in carrying out the functions of government, ensuring cohesiveness in these functions, and providing advisory services including political, legal, economic, programmatic and administrative support when required. It is, however, an office in a state of development, and needs to be assessed in terms of its ability to provide the necessary support to the President.

Over the past three years the ODP has assumed a distinctive character as an authoritative locus for a number of important units and policy fora. These enjoy the status of the office to make their maximum impact on the country but have no formal relation to each other except in so far as they are priority "projects", for the most part developmental and transitional in character. These structures include the Youth Commission, the RDP (after the closure of that office), and the offices on the Status of Women and Disabled Persons. In the case of the latter offices, their interventions in national policy, although important, have depended to a considerable extent on the energy of their personnel. Structurally these two offices function separately from the DPSA which formulates policy and provides the substance of the regulatory framework on issues of concern to them, such as equity and employment practices in the public service.

As indicated above, therefore, the Commission recommends that a more appropriate location for the offices on the Status of Women and Disabled Persons would be within the proposed Office of Public Management, where their contributions to policy could be more effectively integrated into the overall strategic planning processes.

In addition, three important cabinet committees have been established within the ODP, comprising ministerial clusters to provide greater coordination and cohesion in the development of government policy-formation. The significance of these committees could well increase either in the ODP or the Office of the President after the transitional period ends in 1999. The three committees are on Economic Affairs, Social and Administrative Affairs, and Security and Intelligence Affairs.

Presently, the outcomes of the discussions in these fora are of an advisory nature and the mechanisms by which they feed into the inter-governmental and cabinet structures are unclear. As ad hoc bodies they are informal but of some importance, not least for the purposes of policy cohesion and the articulation of guidelines to the three advisors in the Deputy President's Office (for economic, legal and political affairs respectively).

The Coordination and Implementation Unit (CIU) is a new unit in the process of formation in the ODP. Its performance could not be assessed by the Commission as it is largely in the planning stage. The unit will be overseen by a Deputy DG in the Deputy President's Office, and will be divided into four parts, each headed by a chief director with responsibility respectively for coordination and implementation in the following broad sectors:

The Social Sector (encompassing Education, Health, Housing and Welfare).
The Economic and Development Sector (encompassing Finance, Trade and Industry, Public Works, Transport and Tourism, and Minerals and Energy);
The Justice System Sector (encompassing Correctional Services, Safety and Security and Justice);
The International Relations Sector (encompassing Foreign Affairs, Defence, Home Affairs and Trade and Industry).

The CIU by itself will not be able, of course, to guarantee the necessary coordination. This will also involve a greater commitment to coordination from all departments and agencies, especially by senior managers. Nevertheless, the CIU could and should play an important facilitating role. However, if the CIU is shortly or eventually to provide the necessary support for cabinet committees, its structure would need to conform more directly with the existing committee structure, unless this is to be radically changed. As the functions assigned to the ODP are dependent on the tasks delegated to it by the President, the precise form of the ODP will change from time to time, depending on the exigencies of the moment, and cannot be fully anticipated. The terms of reference of the CIU, however, provide an important basis for strengthening support to the Cabinet and the implementation, coordination and management of government policy. It would, however, be more appropriately located in the Office of the President.

The Commission recommends, therefore, that the CIU be transferred to the Office of the President as soon as possible and be integrated with the structures in that office so as not to duplicate effort.

Currently the terms of reference of the CIU overlap widely with the activity of the Office of the President, namely:

To co-ordinate policy and governance;
To integrate, and synthesize all spheres of government;
To monitor the implementation process;
To co-ordinate the different clusters;
To reconcile different government activity as one whole.

Yet the functional relationship of the CIU to the structures in the Office of the President is unclear. This will have to be resolved if the unit is to be effective in the short term. Further consideration is needed as to whether the CIU is the appropriate design for a structure within the proposed Office of the Cabinet Secretariat. If effectively managed, the CIU could well help to strengthen efforts to communicate policy, coordinate inter-sectoral activities and monitor progress but it could not do this without an immediate interface with the Office of the President.

The Commission recommends, therefore, that a reconsideration of the structures and location of the CIU be undertaken as soon as possible, particularly with a view to integrating its work with that of the proposed Office of the Cabinet Secretariat.

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2.4 Inter-governmental relations (IGR)

Whilst inter-governmental relations (IGR) are only at a formative stage in South Africa, the relationship between and within the different spheres of government has emerged as an issue of key concern to the Commission. We were particularly concerned with the management of inter-governmental relations and the viability of the mechanisms for the communication of cabinet policy to departments and provinces throughout the government machine. In this, the role of the centre, the efficacy of existing structures, and their capacity to implement national policies were a cause for considerable concern. Our views on this subject are further elaborated in Annexure 4, attached to this report.

2.4.1 Weaknesses at the Centre of Government

Concerns about weaknesses at the centre of government were a recurring theme during the public hearings of the PRC and in the specialist and process studies conducted by the Commission's task teams.

Both national departments and the provinces repeatedly pointed to the fact that weaknesses in the structures and practices of inter-governmental relations led to poor coordination within and between different departments and spheres of government, creating an incapacity to implement national programmes and a consequent failure to deliver basic services.

In view of these shortcomings the Commission has dealt at length with the inter-sectoral management of affairs between and across the three "spheres" of government. Similarly, in view of the importance attached to this matter, the Commission initiated specialist studies to examine the issue of Inter-Governmental Relations in more detail and to make recommendations as to how relations might be improved (see Annexure 4).

Of considerable interest to the Commission was the viability of the structures and mechanisms established so far to promote and co-ordinate IGR. In addition to the Cabinet and line ministries, these include the Inter-Governmental Forum (IGF), MINMECs, the NCOP and various Technical Committees.

2.4.1.1 The Inter-Governmental Forum (IGF)

This body was established to provide an opportunity for consultation and joint decision-making between ministers and premiers on all matters of mutual interest. It is, however, an informal body and has no legal basis for the decisions reached by its members. No legal mechanisms are available to ensure that governments adhere to the decisions taken by the IGF. It depends therefore largely on mutual trust.

The permanent members of the IGF are all at the heart of the public administration system and are central to inter-sectoral coordination. They presently include the Minister of Provincial Affairs and Constitutional Development, the Minister for the Public Service and Administration, the Minister of Finance, the Director General of the President's Office, the nine provincial premiers, and, ex-officio, the President and Deputy President. The main functions of the IGR are the establishment and implementation of an integrated and coordinated IGR policy framework; multi-sectoral or lateral policy issues, finance and fiscal matters and constitutional concerns.

The coordination of this body rests with the Minister for Constitutional Development who presides over meetings and presents the decisions of the IGF to cabinet.

Our recommendation for the disestablishment of the DCD as it is currently constituted, and the creation of a Chief Directorate for Inter-Governmental Relations, is designed to enhance the status of IGR and enable it to oversee, monitor and intervene where necessary in inter-governmental interactions (see later Sections 2.5.7.6 and 2.5.7.9).

2.4.1.2 Ministerial Forums (MINMECs)

These are sectorally-based meetings of national ministers and provincial MECs, established to promote co-operation, coordination and communication between the national departments and their provincial counterparts. MINMECs comprise a national minister and members of the executive council (MECs) in each of the provinces, e.g. the Minister of Finance together with the MECs for finance in each of the provinces. Depending on the sector, MINMECs reportedly meet fairly regularly, and discuss the implementation of government policies and the division of financial and other resources. Their deliberations are less overarching and more sectoral and detailed in character than the matters discussed by the bodies such as the Cabinet or the Inter-Governmental Forum.

The responsibilities of the MINMECS include:

The harmonisation of legislation within a given sector;
The division and deployment of financial resources;
The harmonisation of programmes on a national basis;
Consultation and negotiation on national norms and standards;
The integration of inter-governmental policies and strategy;
The formulation of joint programmes and projects;
The sharing of sectoral information;
The assignment of roles and responsibilities between spheres of government.

2.4.1.3 The National Council of Provinces (NCOP)

Chapter 4 of the 1996 Constitution makes provision for an NCOP, which provides a direct channel for provincial governments to participate in policy formulation at national level. Structurally the NCOP comprises a ten person delegation from each of the provinces including four "specialist" delegates, (the premier/or delegate, plus three others) who, within their level of competence, can issue legislation of common interest to all provinces which can feed into the national legislative process. The impact of this relatively new structure has still to be felt by government but, given its inclusive character and its potential to marshal provincial opinion, it is likely to play an increasingly significant role.

However, the NCOP is designed more for the discussion and determination of broad policy than for the management of inter-governmental relations. Nevertheless, the desirability of a formal linkage between the premiers and the Office of the President as a means of communicating policy and avoiding potential conflicts is a matter needing serious consideration on the part of government.

2.4.1.4 Technical Committees

Quite a number of technical committees have been established to support the political structures for IGR, and to promote co-operation and consultation at the administrative level. The most prominent of these structures is the Technical Inter-Governmental Committee (TIC) established as the administrative support structure of the Inter-Governmental Forum (IGF). It discusses matters falling within the responsibility of the IGF and makes proposals on how to address them. It also facilitates, guides and monitors the implementation of decisions taken by the IGF and reports back on progress. This body meets on a quarterly basis and is chaired by the Director General of the Department of Constitutional Development.

In addition to the TIC there are technical committees for each of the twenty MINMECS. Each of these committees is supported by an array of sub committees, both technical and inter-sectoral, and is attended by all the relevant national and provincial DGs.

2.4.2 Overall Assessment of Inter-Governmental Relations

Having noted the instruments and developing forms of IGR, it is to some extent possible to assess the system as a whole. In doing this we are mindful that our Constitution is less than two years old. It is therefore not surprising that the form of inter-governmental relations, as set out in the Constitution, is in many ways not working as smoothly as intended. A culture of inter-governmental relations, based on technical capacity, has still to evolve.

Inter-governmental relations in South Africa (as elsewhere) are shaped by political, administrative, legislative and financial factors and these individually and collectively impact on the overall performance of the system of government.

2.4.2.1 The Marginalisation of the IGF

The IGF has recently been subject to severe criticism, especially from provincial governments. Amongst the points of critique raised are the following:

Because MINMECS are responsible for most line function coordination between national and provincial departments, there remains relatively little for the IGF to do.
Agendas of the IGF contain few matters of substance or importance and they lack focus.
There is a feeling that most IGF meetings are of an informative rather than of a consultative and deliberative nature.
- Ministerial attendance of IGF meetings has been poor, particularly on the part of national ministers, and this reflects the lack of importance attached to this structure by the National Government.
- The relationship between the IGF and other IGR structures, MINMECS in particular, is unclear and confusing.
- The IGF appears to have little if any decision making authority.
- The establishment of the NCOP has served in some ways to further marginalise the IGF.

Our conclusion is that the efficacy of the IGF is open to considerable uncertainty, given its increasingly limited use. Meetings of the IGF initially took place on a monthly basis, but in 1996 these were rescheduled to bi-monthly meetings, and in 1997 they were further reduced to quarterly meetings.

In view of this, the Commission recommends that the roles and responsibilities of the IGF be reviewed and consideration given to its restructuring or, alternatively, to its abolition. In particular, there will need to be a far closer working relationship between the IGF (if this body is to be retained and we believe it should) and MINMECs in particular and with other IGR structures in general. The present poor information flows and lack of communication between IGR structures often results in contradictory or duplicatory decision making.

2.4.2.2 MINMECs: Constraints and Deficiencies

The contribution of MINMEC structures to inter-governmental co-operation and coordination has been substantial, but the institution, as a whole, has not been without its limitations. Amongst the stated shortcomings of the MINMECs are the following:

They are highly sectorally focused and pay insufficient attention to related functional areas; as a consequence, they encourage the fragmentation of policy formulation;
The large number of MINMECs necessitate numerous meetings and this leads either to poor attendance or attendance by low ranking officials;
MINMEC agendas are dominated by issues which should more properly be dealt with by technical committees;
MINMEC meetings are dominated by the National Government and do not really lend themselves to consensual decision-making;
The management of meetings, the preparation of supporting documentation and the conduct of proceedings are poor;
There is a lack of clarity over the decision-making authority of MINMECs and insufficient capacity to implement decisions.

These constraints, notwithstanding, MINMECs do have an important role to play in promoting IGR, and a number of departments are attempting to overcome the deficiencies identified above. A more effective means for promoting multi-sectoral coordination between MINMECs is, however, clearly necessary if the present fragmented and uni-sectoral approach to policy formulation is to be overcome.

2.4.2.3 Technical IGR Structures: Uneven Performance.

The technical committees and structures set up to facilitate IGR have had mixed success. While some are clearly functioning well and are actively promoting the development of integrated government systems, others appear to be functioning with little effect or not at all. Technical structures set up to coordinate activities between national and provincial line departments are generally functioning well, but inter-sectoral committees have had only limited successes. The Technical Inter-governmental Committee, for example, has been severely criticised for its failure to promote more effective IGR at the national level.

Generally speaking, where political IGR structures are not functioning well, the technical support committees soon lose direction. This is because there is no consistency in policy formulation, little follow up on decisions and no inducement to ensure compliance with decisions taken.

Special task teams, however, have been successful in bringing together inter-sectoral teams from national and provincial departments (examples include the National Sanitation Task Team, and the Inter-Ministerial Committee on Young People at Risk). The success of these teams appears to stem from their results orientation, their specific terms of reference and set time frames.

2.4.2.4 IGR Between National Departments: Poor Coordination and the Limited Role of the Centre

Without exception officials interviewed at the national level spoke of the poor coordination of activities between national departments. This appears to be due in no small measure to the fact that there has not, hitherto, been an effective mechanism for ensuring coordination of administrative activities at this level. It is significant that virtually all the committees, technical teams, and working groups set up to promote IGR, focus on relations between national and provincial departments, while relatively little attention has been paid to strengthening co-operation and coordination between national departments.

It is evident, moreover, that IGR was not a strong feature of the previous political dispensation and many national departments operated with a considerable degree of independence. The Bantustan system and the racial segregation of areas and services also served to fragment governmental activity to a considerable extent. Although both the Cabinet and the State Security Council did coordinate activities to an extent, their focus was often narrow and their focus oppressive. The State Security Council, as might be expected, focused its attentions on security issues, the promotion of the economy (countering sanctions) and other issues important to the survival of apartheid rule. As a consequence, there has not been a strong historical foundation or institutional memory of effective IGR on which to build.

In addition, the Interim Constitution did not provide any guidance on the question of IGR, and this issue was only addressed in the Final Constitution. For the first two years of the new Government, therefore, there was uncertainty as to what form IGR should follow.

2.4.2.5 Gap at the Centre of Government

It is evident that the National Cabinet provides a focal, and generally effective platform for coordinating national policy. However, once policies have been made at this level, there is no institution in place to follow decisions up, both to ensure that they are being implemented and to ensure that this is being done in the agreed manner.

At one stage it had been thought that the Director General in the Office of the President, who is also Secretary to the Cabinet, would play such a coordinating role. It was also felt that this same DG could perform a function similar to that of the Secretary to the Cabinet in the United Kingdom, and in a number of Commonwealth countries, and assume the role of head of the civil service. This never transpired, however, in part due to the fact that the DG's role was confined, in practice, to a more limited role of administrative secretary to the President's Office and the Cabinet itself. The Commission's proposal for the creation of a head of the public service addresses this.

In the absence of an individual or an institution charged with the responsibility of ensuring coordination across national departments, officials interviewed spoke of IGR at the national level as being ad hoc, unstructured and erratic. In addition, a failure to coordinate activities at the national level, as already noted, has given a decidedly uni-sectoral dimension to inter-governmental relations with other spheres of government.

2.4.2.6 Role of the Department of Constitutional Development (DCD)

In an effort to address the above shortcoming, the Department of Constitutional Development has assumed a proactive role in promoting inter-sectoral IGR. However this is an intervention that has not been welcomed by all other departments and could, if not carefully pursued, aggravate rather than promote IGR. This is because there needs to be a clear distinction between the Department's defined role of promoting IGR and its presently assumed role of coordinator. At present the two roles are blurred, and it is doubtful whether the Department carries sufficient political stature to be able to fulfil the role of coordinator. Our proposal for the establishment of a Chief Directorate for Inter Governmental Relations, located in the Office of the President, seeks to remedy this.

Some steps have, in any event, been taken at the national level to promote more inter-sectoral coordination. These include the establishment of the Budget Council (an expanded version of the Finance MINMEC, which includes Directors General of the Departments of Finance and State Expenditure), the Treasury Committee (comprising the ministers of Finance, Home Affairs, Labour, Trade and Industry) and the Coordination and Implementation Unit (CIU) currently being set up in the Office of the Deputy President. This collective involvement of departments with a stakeholder role to play in coordination is, in our view, one which should be encouraged.

2.4.2.7 IGR within the Provinces: Failures in Coordination

Failure to coordinate policy at the national level has had a "knock-on" effect in the provinces. Perhaps the most glaring examples of the shortcomings of uni-sectoral IGR is to be found in the sphere of budgeting. Broad agreement on sectoral policy in areas of concurrent responsibility is generally reached through the various MINMECS. Provincial budgets are, on the other hand, approved through the Budget Council (the Finance MINMEC) applying formula derived by the Financial and Fiscal Commission (FFC). However, as there is no formal institution through which the Budget Council and individual MINMECS are able to discuss policy implementation, there is invariably a mismatch between available funds and the programmes agreed upon by the MINMECS. This is a serious deficiency that needs to be addressed urgently by government.

Inter-sectoral coordination within the provinces is limited and the development of integrated programmes is not taking place. This is due partly to the confusion that prevails in certain provinces over the coordinator role of the provincial DG, but it is also due to a failure to institutionalise inter-sectoral meetings, to coordinate policy formulation, and to ensure that policies are implemented collaboratively. In a number of provinces there appears to be poor coordination between the treasury and line departments and this leads to a situation where programme budgets do not match available funds.

A further constraint at the provincial level relates to poor coordination between policy makers and administrators. Officials interviewed at national and provincial level spoke of the problem of policy decisions being taken without consideration being given to local capacity.

2.4.2.8 IGR and Local Government

Very few IGR structures have been set up to promote coordination between local government departments and the other two spheres of government. Despite the provisions of the 1996 Constitution, local authorities have yet to be integrated as a distinct sphere into the broader system of government. Formal institutions to promote inter-governmental relations between local and national and provincial governments are either embryonic or non-existent. As a consequence, where concurrent responsibilities extend to the local level, these are generally not integrated with national and provincial programmes. Part of this has to do with the fact that the focus of IGR thus far has been on the relations between national and provincial governments, but it also has to do with the variable capacities of local government.

Our proposal for an inquiry into the functions, needs and relations between the three spheres of government is urgent. Equally so, is our proposal for the establishment of a Ministry of Local Government (see below).

2.4.2.9 The Impact of Financial Systems on IGR: Mismatch of Budgets

The formula and procedures for the financing of the different spheres of government are addressed in detail in Chapter 5 of this report. However, mention must be made of the impact which the financial regimen is having on IGR and on the performance of provincial and, to a lesser extent, local governments. A failure to coordinate sectoral programmes with national and provincial budgets is, in particular, an ongoing problem in many of the provinces.

The mismatch of budgets with administrative capacity is a further difficulty which results in the tying up of unspent monies in the provinces. In that respect, consideration will need to be given to the formulation of more creative mechanisms for the disbursement of funds from national to provincial governments, since the present programme of financial decentralisation has had very mixed results.

2.4.2.10 Review of the Legislative Framework: Continuing Impact of the Previous Social Order

Many of the dimensions of IGR between and within the three spheres of government continue to be shaped by legislation derived from the previous political order. Much of this is inappropriate for a democratic non-racial society, especially as it serves to perpetuate the fragmentation of service delivery.

A comprehensive review and, where necessary, repeal of legislation is an ongoing process which will take some time to complete. However, where specific legislation has been identified as being a direct constraint to more effective service delivery between sectors and between spheres, special measures will need to be taken to expedite the drafting of appropriate legislation.

It is widely recognised internationally that the codification of IGR in legislation is in no way a sufficient condition for improved inter-governmental coordination. However, as a report prepared by Department of Constitutional Development makes clear:

The Constitution requires that there be an Act for inter-governmental relations and the settlement of inter-governmental disputes; this is a mandatory requirement and the National Government has no discretion in this regard.
Co-operative government is a legal norm governing all official conduct and creating positive and negative obligations for all spheres of government which is enforceable in court. If government does not take the lead in providing a coherent interpretation of this regime, a justiciable norm will be established. That is to say, the interpretation presented to the Constitutional Court on the day will be established as the legal precedent that will shape policy choices, with potentially far reaching practical consequences.
There is already in existence an informal, pre-constitutional system of inter-governmental relations, which is regularly criticised for its inefficiencies. Positive legal steps need to be taken to alter this system.
The right time for policy and the completion of an appropriate evolutionary cycle are facts which are neither self-evident nor mutually exclusive of government taking a lead in guiding the development of IGR in a balanced way.
The Constitution does not specify whether IGR and dispute settlement should be dealt with in more than one Act, nor does it preclude other, non-legislative ways of providing for inter-governmental relations. These need to be elaborated.

2.4.2.11 The Commission's Concerns regarding IGR

Although the Department of Constitutional Development's proposed White Paper on IGR will, in the first instance, provide a guide to policy, it should also help to establish a framework for subsequent legislation. Current policy concerns relate to the following issues:

The extent to which the national departments should be responsible for the implementation of co-operative government;
The type of policy instruments required to fulfill that responsibility;
The timing of policy and legislation;
The scope, goals and objectives of policy;
The establishment of a balance between the natural evolution of IGR and the need for prescription;
The content of policy.

Although the Department of Constitutional Development is working towards a coherent IGR policy framework, considerably more attention still needs to be given to the processes which direct inter-governmental relations at present. There is also a need for an institutional audit of national and provincial departments to ascertain areas of overlap as well as areas of duplication; this is essential if confusion over concurrent powers is to be overcome.

2.4.2.12 Conclusions and Recommendations

The following summary conclusions represent the most significant issues to emerge from the PRC's review of IGR.

The Commission's review of the multiple structures established to promote IGR in the public service, suggests that in and of themselves they are probably adequate to redress the diverse dimensions of inter-governmental relations. What is required, instead, is the more efficient operation of these structures, and a better understanding of their objectives.
The institutionalisation of procedures (processes) and the routinisation of meetings is essential. There will also need to be some sanction to ensure compliance with regulations.
Improved information flows between and within sectors in all three spheres of government is a matter of considerable importance. It is evident that provincial officials and political office bearers are often not well briefed before entering into negotiations with other levels of government. Because of this, they commit provincial departments to the implementation of policy which they lack the administrative and financial capacity to fulfill.
There needs to to be greater attention paid to the strengthening, and where necessary creation, of mechanisms to engage civil society in the processes of inter-governmental relations.
Inter-governmental relations between local government and the other two spheres of government are weak and will need to be strengthened as a matter of urgency.
Communication is poor. It is evident that decisions taken at the highest policy levels (the Cabinet, IGF and MINMECS) are not always adequately conveyed down to the implementing department. Alternatively, decisions taken are not adequately monitored and followed up. In that respect, the IGF is not functioning well and it should be either restructured or abolished.
There is a strong need for the development of a coordinating mechanism at national level. The establishment of the Coordination Implementation Unit in the Office of the Deputy President could fulfill this role. The transfer of the IGR function from the Department of Constitutional Development to the Office of the President is a matter of priority.
Consideration should also be given the creation of a stronger portfolio for the Secretary to the Cabinet as the head of the civil service. There is a need for an effective mechanism to follow up decisions taken by the Cabinet in order to ensure that policy is being implemented and that it is being implemented in the correct manner.
There is no institution assigned responsibility for overall planning at either the national or provincial levels; this will need to be addressed. In the provinces, such an activity should be vested in the DGs office.
There is a pressing need for the transmission of a coherent national vision for development from the National Government; at present the RDP has faded into obscurity in certain quarters, while GEAR remains highly controversial.
There needs to be far greater clarity on the responsibilities of the different national departments, and a clearer demarcation of responsibilities to avoid unnecessary overlap, duplication and conflict.
There needs to be a review of political portfolios at national and provincial level in order to ensure that there is congruence between them. The present configuration of portfolios appears ad hoc, and creates problems for IGR and inter-sectoral coordination.
There needs to be greater clarity on the obligations of different spheres of government where there are concurrent responsibilities. This will require both detailed discussion and, in certain instances, legislation.
A review of legislation on operational matters is a matter of urgency in many sectors, and may call for the blanket repeal of certain acts.
It needs to be recognised that a lack of capacity exists in all three spheres of government (but particularly at provincial and local levels). This is a serious constraint to efficient IGR and that this will need to be addressed.
Serious consideration should be given to the asymmetrical devolution of functions (i.e. the devolution of some of the functions to provinces and municipalities where there is capacity to undertake services rather than delaying such devolution until there is capacity overall) as has been proposed by the Department of Housing. This could go some way to redress problems of capacity without violating the provisions of the Constitution.
A closer integration of budgeting processes with sectoral and inter-sectoral planning processes is vital to the implementation of more effective IGR.
Further expansion and development of Internet and E-Mail systems and extensive training in their usage would help to facility information flows between officials in the different spheres of government.

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2.5 National ministries and departments

As we have indicated earlier, there is no intention in this overview to give a blow by blow account of departments and ministries. We adopt a two-pronged strategy here. In the first place, we provide, in a separate appendix at the end of this report (Appendix 3), a list of comments and observations made by individual Commissioners in respect of specific departments. These do not constitute the Commission findings, but simply impressions gleaned by Commissioners. They are merely intended to assist departments and ministries in their planning.

Secondly, we identify issues, whether department-specific or cross-cutting, which are worthy of the Government's attention. These are discussed below.

2.5.1 Differing Concepts of Transition

All departments claimed to be engaged in some form of transformation. Yet the conceptualisation of transformation varies considerably across the public service -- with some departments emphasising representivity or accountability, and other placing a greater premium on service delivery or institutional change (see Section 4.2 in Chapter 4). Few departments seem to have adopted the holistic and integrated approach to transformation advocated in the WPTPS. Transformation strategies have sometimes differed according to the nature of departments. Direct service departments such as Health, Education, Welfare and Water Affairs seem to have been better able to link their transformation programmes to service outcomes than those rendering indirect services such as Finance, State Expenditure and Public Works.

Part of the problem may have been the understandable zeal of the new Government to drastically turn things upside down overnight, which is some cases seems to have resulted in intolerable overloads and inefficiencies. Change clearly has to be prioritised and focused.

It seems that the prevailing attitude in most departments is that internal transformation and service delivery are seen as "trade-offs," rather than as complementary parts of an integrated and holistic process. This has been particularly evident in the Departments of Housing and Transport, where internal transformation, affirmative action and capacity building do not appear to have been priorities. The Departments of Agriculture and Health, on the other hand, seem to have achieved a better balance between service delivery and internal transformation than other departments (see the statistical analysis of public service personnel in Annexure 2 attached to this report).

In the case of the Department of Health, the reorientation of the focus of policy to primary health care and the integration of the department into a single entity from 14 former departments reflects two major aspects of the department's transformation. The management of change in hospitals, where the practice of discrimination was still rife, and the extension of health care provision to rural populations were equally important steps in the transformation of the health system. The latter included the unification of the health system from its fragmented structures, reduction of disparities in health service delivery, increased access to integrated services based on primary health care principles, and priority to the care of children and women. Partnerships with NGOs, International Donor Agencies and Science Councils and close collaboration with health related departments has led to an increase in capacity and important improvements in inter-governmental relations. At the same time the reorganisation of human resource management has succeeded in changing the profile of the managerial echelon in the Department from 99.6% white males prior to 1994 to 50% in 1997. Despite these achievements, there are a number of issues which the PRC pointed to and which remain to be addressed (see Issues Section in Appendix 3).

All the finance-related departments (Finance, State Expenditure, and the SA Revenue Services) have experienced difficulties in transforming the racial, gender and occupational profiles of their personnel. The ratio in the Department of Finance (DoF), for example, is currently 60% white and 40% black, most of the latter falling below the management echelons (see the statistical analysis in Annexure 2 attached to this report). The DoF admitted that it had failed to recruit women and Black males in sufficient numbers in specialist fields, largely, they argued, because they were competing with the private sector for the same market. An added problem was in their view the shortage of Black people with specialist accounting skills due to lack of access during the apartheid period. This weakness is evident in other "professional" departments where lack of representivity is linked to skills shortage. Prominent among them are Water Affairs, Transport and Land Affairs.

The Departments of Justice and Foreign Affairs have avoided the introduction of well-articulated affirmative action policies and strategies, preferring instead to rely on a "flexible approach" or "placement guidelines." This has resulted in few changes in the transformation of the profile of personnel in the department, as well as relatively few institutional changes that normally accompany effective affirmative employment programmes. The statistical analysis contained in Annexure 2, attached to this report, illustrates the lack of progress in such departments.

The Commission strongly urges government to avoid any unwarranted correlation between the race and ethnicity of elected persons and the senior officials they appoint in their departments.

2.5.2 Service Delivery

The Commission noted the encouraging improvement in service delivery that has taken place in a number of national departments since 1994, although we felt that there was still scope for further progress. Other departments have done less well, however. Those in a near crisis situation include Education, Safety and Security, Correctional Services and Justice. Reasons given for lack of delivery range from structural limitations (including the lack of capacity and problems associated with the rationalisation process) to the lack of will and ability on the part of senior public service managers. In Chapter 3, Section 3.7 on "Managing Service Delivery," we examine these and other constraints in greater detail.

There is no doubt that the difficult task of rationalising and integrating the administrations of the RSA and the former "Bantustans" has pre-occupied many departments over the past three years, at the expense of service delivery. There is also no doubt that this task was more complex in some departments than others (and particularly in those that have collective oversight of the criminal justice system). Nevertheless, the Commission believes that, despite such problems, more could and should have been done to improve the levels and quality of service provision. To reverse this situation there is an urgent need for bold policies for strategic transformation and a management cadre with the political and administrative will to implement meaningful change. In particular, the criminal justice system needs to be reconstructed, as a matter of urgency. The widespread responsibility of the Department of Justice to ensure that the courts, tribunals and related institutions function effectively and efficiently is a basic requirement of a democratic environment. Failure to effect this mandate in facilitating appropriate legislation, creating the necessary policy frameworks and ensuring that courts and the prosecutorial services function in a way that serves the democratic dispensation, seriously undermines the conditions for co-operative governance and frustrates the efforts of other organs of the state, civil society and individual citizens to develop such a culture.

The crisis in these departments has been widely covered and stems from a variety of sources. The departments are inadequately coordinated, erratically restructured and apparently dysfunctional at some levels. Greater management capacity in all of them is required at senior level. Escapes from prisons have been chronically regular and there has been a notable failure to provide credible assurances that mechanisms are in place to avoid these in the future. Provincial heads were instructed to achieve a 50% drop in escapees by the end of 1997. However, no strategy is in place to achieve this. Similarly, the Education Department seems to lack a coherent strategy for implementing its numerous policy documents.

The Commission recommends that, in the case of departments such as Safety and Security, Justice, Correctional Services and Education , serious consideration be given to a major re-engineering and rationalisation at senior level, as an urgent imperative. The President and responsible ministers are urged to reassess the suitability or otherwise of some of the top echelons of their public managers.

2.5.3 Inter-Sectoral Communication and Coordination

The flow of information between and within departments and spheres of government is currently not well managed. The Commission noted with concern, for example, that the Department of Constitutional Development (DCD), with such an important inter-sectoral role, was hardly appraised of the Deputy President's Policy Coordination and Implementation Unit (CIU). Similarly, where inter-departmental and inter-sectoral linkages occur, they are often untidy, and compounded by recurrent overlaps. The relationship between the DCD and the Department of Finance regarding inter-governmental fiscal relations requires further clarification.

The Commission has also discerned some confusion, especially in the provinces, regarding government policy. This is particularly the case with respect to the RDP and GEAR. In some cases there was a strong belief that the RDP and not GEAR was the provincial policy. At the same time a number of departments, agencies and provinces do not always seem to march in concert.

The problem extends to policy implementation. There appears, for example, to be conflict between the Department of Public Works and other departments such as Health, Education and Justice. The latter have complained about delays arising from their dependence on Public Works. Similarly, it is evident that coordination is weak between the departments of Foreign Affairs and Trade and Industry. There is also confusion about the Department of Labour's role in the development of policies which affect the public service, and concern about possible duplication with the activities of the DPSA. The same confusion is evident in the relationship between the legal services section in the Department of Labour and the state attorneys in the Department of Justice. These and other anomalies were identified by the PRC during the public presentations by departments and provinces.

2.5.4 The Department of Public Service and Administration

The high quality of the DPSA's activities and their contribution to the future excellence of the public service is recorded elsewhere in this report. The purpose of this section is to assess the role, place and structure of the department to give better effect to the approaches it has taken to improve the quality of the public service. Since its establishment in 1995, the DPSA's main preoccupation has been to drive the transformation process. Given the problems associated with the other agency charged with a major responsibility for driving transformation, namely the Public Service Commission (see below), this pre-occupation is quite understandable. It is evident to the Commission that the DPSA may well have evolved differently if the PSC had been able to play a more proactive role in accelerating the transformation process.

The key question, put by one of the Commissioners to the DPSA (though not answered) was "After transformation - what is the role of the department?" Obviously transformation is an on-going process but the pace and intensity are likely to diminish by the year 2000. The thrust of all the PRC's task team reports is that there is likely to be increasing delegation from the DPSA to the departments and provinces. Once the major elements of transformation have been broadly achieved, therefore, and the public service is more "stabilised" at national and provincial levels, the Commission believes that there will no longer be a continuing need for a large department of public service and administration.

The Commission therefore recommends instead that a leaner Office of Public Management (OPM), strategically located in the Office of the Presidency, would be more appropriate and would provide the Office with the necessary authority to engage more effectively with other departments and with the provinces.

The OPM would be responsible under the President for the overall direction and coordination of the public service, and would have a small number of directorates for this purpose. These would include human resources, industrial relations, policy formation and planning. Two related units, currently free-standing in the Office of the Deputy President, on the Status of Women and the Status of Disabled Persons respectively, would be located as directorates within the Office of Public Management where there activities could be effectively synchronised.

2.5.5 The Public Service Commission (PSC)

The Commission believes that the mandate of the Public Service Commission requires refinement. In addressing the role of the PSC, we debated whether we were grappling with an institution whose primary value we accepted, or whether we were trying to find a role for an institution we had inherited. In Canada and the United Kingdom, the purpose of the PSC was primarily to protect and advance the principle of merit. In practice, this involved an important advisory role in senior public service appointments.

In South Africa the principle of merit tends to be politically and emotionally loaded. We do not believe that this need be the case. Simply put, our conception of merit is the ability or potential to meet the requirements of the position without unnecessary stress on certification and long experience in the public service. Rather, due emphasis should be placed on the possession of appropriate competencies, experience and skills. Where certification is professionally essential, it should not be the sole reason for the appointment of the person.

It is to be expected that, given the evolving political environment of the public service, new skills and qualifications will be imperative. Personnel with long experience in the South African Public Service will not necessarily be an advantage to the service where inappropriate attitudes to transformation are perpetuated.

Nevertheless, even if the PSC's role were to be limited to an advisory one in respect of senior public appointments, it is clear that its present size and budget would be out of proportion to its task. Our view is that the PSC should be reduced substantially and located in the Office of the President. Much of the investigatory and complaints monitoring activities of the Commission could and should should be outsourced, where appropriate, as suggested below.

Chapter 10, Section 195 (1) of the 1996 Constitution replaces the national and provincial service commissions established by the Interim Constitution with a single independent and impartial Public Service Commission, comprising 14 commissioners, five of whom will be appointed by the President with the approval the National Assembly and nine (one per province) who will be appointed by the President on the nomination of the provincial premiers and with the approval of the provincial legislatures.

The main functions and powers of the new PSC set out in the 1996 Constitution are:

To promote the values and principles of public administration set out in section 195 of the Constitution throughout the public service;
To investigate, monitor and evaluate the organisation, administration and personnel practices of the public service, and in particular the adherence to the values and principles set out in section 195, as well as to public service procedures;
To propose measures to ensure effective and efficient performance;
To give directions aimed at ensuring that personnel procedures relating to recruitment, transfers, promotions and dismissals comply with the values and principles set out in section 195 of the Constitution;
To advise national and provincial organs of state regarding personnel practices;
To report its findings and recommendations at least once a year to the National Assembly or Provincial Legislatures as applicable;
To report issues of immediate operational concern to the relevant executive authority;
To investigate grievances of employees and recommend appropriate remedies.

With the exception of this last function, which we feel could be more appropriately handled through the conciliation and mediation services established by the 1996 Labour Relations Act, the Commission believes that these should continue to be the core functions of an independent public service commission.

To fulfil its constitutional obligations the PSC Commissioners will need to be assisted by able personnel and supplied with the necessary resources. In this regard it is anticipated that the Commission's Office will consist of a fairly small post establishment with a high level workforce. This will inevitably involve further reductions from the PSC's current staffing complement of 148, as well as training and re-training of those staff that do remain.

As the new service commissioners have not yet been appointed, the PRC was unable to assess the workings of the new model for the PSC. The vacuum created whilst the new system replaces the old enabled the PRC, however, to consider what is perhaps a more fundamental question - whether there is a need for a PSC at all. The PRC is of the opinion that such a need exists but the body currently in place needs to be quite radically and more appropriately structured so that it is capable of carrying out the above functions more efficiently, effectively and cost-effectively.

In coming to this conclusion, we have been mindful of the need to provide a rationale, as well as to address a number of serious problems and challenges that will inevitably confront our proposal. In arriving at our rationale for a major change in the composition and nature of the PSC we identified two broad and related reasons for calling the continued existence of the organisation as currently constituted into question. The first relates to the roles and relationships of the new body. The second relates to its likely efficiency and cost-effectiveness.

It was not clear to the PRC how the PSC would interact with key departments, such as the DPSA, the Auditor-General, the Public Protector, the Departments of Finance and State Expenditure and the Central Bargaining Chamber. Given the current roles of many of these existing bodies in the monitoring and evaluation of public service delivery, it was not immediately apparent to the PRC what "added-value" the PSC would bring in this regard. Nor was it clear whether the PSC would be responsible for ensuring that the public service was representative, efficient and effective, or whether it would simply report on defaulting departments after which it would be left to other structures to make the appropriate interventions. If the latter, an inspectorate could well be more appropriate, some of its personnel being outsourced from the private sector, research and tertiary institutions, according to the specialisation needed.

Whilst the Commission appreciated the need for an independent body to promote the enabling values and principles governing the administration of the public service as set out in Chapter 10 of the Constitution, it did not consider the proposed revision of the structures of the PSC (as outlined in the Constitution) cost effective or necessarily efficient for this undertaking. We were particularly concerned about the cost of the PSC in times of financial stringency, especially as the appointment of the 14 new PSC commissioners (with salary packages equivalent to those of ministers) is likely to be based on political acceptability as much if not more than professional and technical expertise in the areas of monitoring, evaluation and research. Similarly, we were equally concerned about the appropriateness and relevance of the skills and competencies of many of the current staff of the PSC to the new needs of the organisation. If the PSC is to remain, there would clearly be an important need to bring in new blood, as well for the redeployment, training and re-training of current staff.

In the view of the Commission, therefore, a less elaborate and more professionally managed body would be more suitable for carrying out most of the monitoring and standards-preserving functions outlined above.

Such a body would have a limited staff, supplemented according to need, and would report to the President, as well as to parliament (particularly through the relevant parliamentary portfolio committees). This leaner body, we propose, would be more appropriately located as an independent commission in the Office of the President.

The mediation of grievances, which is also one of the contemplated functions of the new PSC, could in our opinion be more appropriately undertaken through the mediation and conciliation mechanisms established by the 1996 Labour Relations Act.

The PRC's proposal, if accepted, may require a constitutional amendment, requiring a two-thirds majority in the National Parliament. As this may take some time to arrange, this gives rise to a more immediate practical difficulty, associated with the fact that the 14 new PSC commissioners are about to be appointed. The PRC therefore recommends an immediate moratorium on this process, whilst the implications of our proposals are being fully considered.

We realise that our proposal is of direct concern to the provinces in respect of standard setting and monitoring regarding the ethos and comportment of the public service, as addressed in the Constitution through the nomination of 9 of the 14 PSC commissioners from the provinces. The PRC proposal changes this. The Commission, however, is not sure whether this will be a big loss, especially as it is unclear whether the new PSC will be in a position to establish effective provincial offices in any case.

We also recommend that provincial influence be ensured by re-inforcing the parallel monitoring and inspection units already functioning in the offices of the provincial premiers (and ensuring that these are created in the provinces where these have not already been established).

Such provincial units would be required to report both to the Premier and the Provincial Legislature. In addition there should be an effective coordinating structure to ensure effective and regular communication and liaison between their work and that of the independent commission located in the Office of the President.

The Commission therefore recommends:

That serious consideration be given by the President to replacing the PSC as envisaged in the 1996 Constitution by the alternative structures recommended in this report.
That if the Commission's recommendations in this regard are accepted, an appropriate Constitutional Amendment be prepared, if necessary, for consideration by the National Parliament.
That in the interim an immediate moratorium be placed on the appointment of the 14 new PSC commissioners.
That if the Constitutional Amendment is approved by parliament, a central public service monitoring and inspection unit be established in the Office of the President, as an independent commission of 3 eminent and experienced persons.
That this unit be responsible for the constitutional functions outlined above, with the exception of that of investigating grievances of employees which in future would be more appropriately handled by the mechanisms established under the 1996 Labour Relations Act (though the new unit would have general oversight over these processes and report on them to the President and Parliament).
That lean parallel monitoring and inspection units be established in the offices of the provincial premiers to carry out similar functions with respect to the nine provincial administrations.

2.5.6 The Restructuring of the Department of Public Works (DPW)

The Department of Public Works is one of the departments at a national level which has attempted to fundamentally restructure in line with its attempts to redefine its role and functions as defined in its policy white paper Public Works Towards the 21st Century. The main innovation is to change from being the main developer and landlord of the public sector to playing a more strategic property development and facilities management role.

By emphasising high level project management and facilities management skills and outsourcing the basic maintenance and professional functions associated with their current role, the department should be able to reduce their staff complement from about 8 000 to about 3 000 personnel. It is envisaged that this will be accompanied by an expansion of outsourcing opportunities for historically disadvantaged SMMEs in line with the department's affirmative procurement policy. This role is critical as far as empowerment is concerned.

While the Commission is supportive of the change in emphasis, it is concerned that this new policy thinking has yet to manifest itself at the level of implementation. The Commission noted the number of complaints voiced about the current DPW services which were seen to be a serious impediment to the service delivery responsibilities of line departments. The Commission therefore believes that the DPW should ensure that its internal transformation process goes hand-in-hand with the delivery imperatives of its client departments.

This does not mean that the transformation process be slowed down. Rather, it could and should mean that the DPW move more quickly to out-source those functions that it no longer can successfully supply. However, the coordination role of the management of assets must remain with the DPW, which should restructure to the extent of allowing autonomy without losing the crucial oversight and coordination role which it has hitherto played.

2.5.7 Independent Agencies

A more detailed study is required into the process which underpins the declaration of certain departments or units as autonomous or independent units. This applies specifically to the SA Communication Services (SACS), the Centre for Statistical Services (CSS) and the South African Revenue Services (SARS). What are the considerations here? In respect of the latter, we are dealing with an organisational component of government that is under-resourced in terms of personnel, capacity and specialist expertise for the fundamental role it has to play. The Commission recommends that SARS should retain its administrative independence, participate where applicable in matters of policy in respect of the areas pertinent to its function, and embark upon an immediate programme of capacity building.

In respect of the Central Statistical Services (CSS), the independence of this organisational component of government, and its ability to provide objective information and data timeously, is vital to efficient governance. It must therefore be able to carry out its tasks without undue constraints and pressures of any kind.

The Commission therefore recommended that the CSS either (i) is retained in its current form but better resourced, or (ii) becomes an independent statutory organisation, similar to that of the State Enterprises or Science Councils. Furthermore, the CSS should report directly to parliament rather than to a minister in order for it to retain the integrity of its research outputs.

2.5.8 New Ministries and Structures

2.5.8.1 Size and Clustering of Ministries/Departments

In addressing the question of ministerial and departmental clusters, the Commission is aware that there is no ideal model of ministerial structures and groupings. The same applies to the number of ministers and departments. The Commission does not accept the position that a small number of ministries or departments is an inherent cost saving device. The financial cost may be an understandable trade off with other social and political costs. A large number of ministries may create problems of coordination and management, but may present opportunities for focus and specialisation. During the early stages of a new government, such as in South Africa in the period since 1994, a case can be made for a significantly large number of ministers and departments. This would, amongst other things, enhance the degree of specialisation in government. In addition, new and inexperienced political and administrative leaders would not be encumbered by large and unwieldy portfolios.

There is another dimension of transition politics which has a direct institutional impact on the size and structure of departments and ministries. It is, for example, relatively unproblematic to keep ministries and departments to the minimum in the circumstances where there is complete alignment between them and a considerable amount of delegation can take place. However, where there is an insufficient level of trust between the political and administrative leadership and where ministers have little confidence that the policies of the government of the day will in fact be carried out, they will tend to take on more "hands on" responsibility for administrative matters than would otherwise be the case.

In direct, practical terms, the Government of National Unity, prescribed by the interim constitution, reserved certain ministers for minority parties. Added to this were political pressures arising from demands for greater representivity according to race, gender, ethnicity, region, as well as by demands by senior members of the Liberation Movement for senior positions in government. All these factors contributed to what, in purely objective terms, might seem to be an unnecessarily bloated number of ministries and departments in the post-apartheid period.

While the Constitution specifies the maximum number of Ministries, the Commission is not convinced that it is necessary to fill all of them. The situation is considerably easier especially in the case of departments. We believe that a substantial reduction in ministries and departments is possible without compromising the work of government. Currently there are thirty four national departments. We believe that not only is this number too high, but the departments themselves are poorly coordinated. There appears in particular to be no real justification for the existence of 15 deputy ministers. If this trend continues there will soon be one deputy minister for every minister. The Commission could not fathom the logic of underpinning the assignment of deputy ministers to one specific ministry rather than another. A possible justification for such a high number of deputy ministers would be that they are training grounds for future ministers. This does not really hold, however. Since ministers are appointed at the sole pleasure of the President, it would be unreasonable to expect future presidents to be restricted by their predecessors in the appointment of ministers. In any event, where quality civil servants have been appointed, the need for a large number of deputy ministers will be reduced.

We conclude that, both politically and administratively, the need for a large number of deputy ministers is still to be demonstrated. We recommend, therefore, that the current practice of appointing deputy ministers randomly be reversed, a proper rationale for appointments be developed and that, in general, ministerial reliance for support should lie with the senior public servants.

Both the Presidency and the Finance department have set good examples in containing their expenditure on staffing. We believe, however, that in their determination to lead by example, they may have undermined their capacity for effective government. There is a clear lesson here for other departments. We have already made specific recommendations in respect to the restructuring of the Presidency. We recommend further that the department of Finance reassesses its staffing requirements and recruit, as a matter of urgency, appropriate personnel. Furthermore, we strongly urge that the department uses this opportunity to address the representivity imbalance.

2.5.8.2 Proposed Creation and Re-configuration of Ministries and Departments

In this section the Commission makes a number of recommendations for the short to medium-term re-configuration of ministries, departments, organisational components and agencies. Later in the section we provide a possible approach to the longer-term re-engineering of the structures of government (see Section 2.5.8.10).

In the short to medium-term, the Commission proposes the disestablishment in their present form of the following ministries and agencies, and their associated departments:

The Ministry of Arts, Culture, Science and Technology;
The Ministry of Correctional Services;
The Ministry of Education;
The Ministry of Justice;
The Ministry of Provincial Affairs and Constitutional Development;
The Ministry of Public Enterprises;
The Ministry for the Public Service and Administration.
The Ministry for Sports and Recreation;
The Public Service Commission as presently constituted under the 1996 Constitution.

We furthermore propose the replacement of these ministries and agencies by the following re-configurations:

A new Ministry of Higher Education and Technology;
A new Ministry of Education and Culture (in which Sport and Recreation would be a Directorate);
A new Ministry of Justice and Rehabilitation (the latter taking over the functions of Correctional Services);
A new Ministry for Local Government;
The re-configuration of the Department of Constitutional Development whereby all its current functions other than local government are located in the Office of the President;
The establishment of the Office of Public Management in the Office of the President to take over many of the functions currently carried out by the DPSA;
The location of a restructured Public Service Commission an independent commission of 3 people in the Office of the President;
The establishment of a number of new central executive agencies in the Office of the President, in particular for Inter-Governmental Relations and Information Systems Management.

In addition to the above, the Commission considered a number of ministries and departments which would logically form coherent and viable combinations. The ministries which the Commission believed were naturally related and to which subsequent consideration should be given include the following suggested combinations:

Given the current lack of effective coordination between the departments of Foreign Affairs and Trade and Industry (noted in Section 2.5.3 above), the Commission also firmly believes that trade officials in embassies should report to the relevant diplomatic representative and not to the DTI.

We therefore recommend that the international trade function in DTI should be phased into the Department of Foreign Affairs; and that the two departments establish a task team to deal with the details of this transfer, especially in respect of the reporting lines.

In making these recommendations, the Commission makes no substantive judgement regarding the suitability or otherwise of the political or administrative personnel in the ministries and departments earmarked for re-configuration. Instead we were guided by how best to enable government and the public service to meet their obligations. We focused mainly on the core functions of departments, and used three main criteria to inform our proposed reconfigurations -- coherence, size, and the imperatives of the transition. The latter notion of core functions also enabled the Commission to employ this logic in respect of outsourcing and the question of right-sizing.

2.5.8.3 Re-configuration of Education Ministries

The re-configuration of the education-related ministries was motivated by the fact that, in our opinion, the current Education portfolio is too large and unwieldy. For this reason for the most part, and despite the exigencies of reconstruction and development, it has not been able to give sufficient impetus to policy on higher education, despite the monumental Report of the National Commission for Higher Education (NCHE). This makes it difficult for tertiary institutions to adopt benchmarks for transformation. At the same time, the Ministry of Arts, Culture, Science and Technology appears incoherent and far too contrived. In the view of the Commission, Arts and Culture should therefore be separated from this ministry and become part of a new Ministry of Education and Culture. Moreover, the Commission could see no rationale for a special ministry of sports and recreation, and therefore proposes that these activities also be represented within this new ministry as a directorate.

We also propose that a new Ministry for Higher Education and Technology should be created to promote the development of science and technology in the tertiary institutions and science councils. These would then be driven by one ministry, thereby better enabling it to focus on its core responsibilities and the coordination of policy, while the department of Education and Culture would cater for generic education, including culture and sport. The two Education Ministries would divide between them the functions previously carried out by the Ministry of Arts, Culture, Science and Technology.

2.5.8.4 Ministry of Justice and Rehabilitation

While there were conflicting submissions before the Commission on the question of combining the justice ministries, we nevertheless came to the view that the Ministries of Justice and Correctional Services should be merged into a single ministry, the Ministry of Justice and Rehabilitation. The functional line between the two current ministries is overlapping and problematical and their separation has tended to undermine the efficiency of the judicial system. The question of the integrity of the Ministry of Safety and Security was considered by the Commission. Our opinion at this point is that a function of the Justice System is precisely to monitor the police. The separation of Justice from Safety and Security, under these circumstances, seems to make a great deal of sense.

2.5.8.5 Phasing-Out of Constitutional Development

There are departments with core functions that are blurred and unfocused. There are also departments which appear to be typically "transition" departments. The Department of Constitutional Development (CDC), displays both of these characteristics. The department is located within the Ministry for Provincial Affairs and Constitutional Development, which also has oversight over local government matters. The Commission was sceptical as to whether the responsibility for local government would or should remain a responsibility of this ministry and department beyond the year 2000.

Indeed, in view of the singular importance of local government and its inter-connectedness with the two other spheres of government, the Commission is of the opinion that a separate Ministry for Local Government is required and accordingly recommends this.

In so far as the residual duties of the DCD regarding inter-governmental relations (IGR) are concerned, the Commission recommends that these be undertaken by a directorate in the Office of the President where the necessary authority for its various interventions across departments and provinces will be greater. This is not to suggest that the department has not hitherto acted with considerable sensitivity as a "trouble-shooter" for problems related to IGR. In fact the Commission's assessment was that the DCD had carried out these duties with considerable aplomb. In fact the main rationale for the department at times appears to have been to deal with the transitional problems of IGR, especially where these have yet to be consolidated as our new Constitution takes root, or where existing structures are failing.

For these reasons we believe that the DCD has been largely involved with phasing in the Constitution. Hence the confusion of its mandate, particularly in regard to the provinces. For instance, what is the relationship between the Minister and Provincial Premiers? The functions of the DCD therefore seem to be either temporary and ad hoc, or simply too big for a single ministry.

The commission recommends, therefore, that the Ministry and the Department for Constitutional Development be phased out and that its oversight functions with respect to IGR be located as a Chief Directorate in the Office of the President.

2.5.8.6 A New Ministry and Department for Local Government

With the phasing out of the Ministry for Provincial Affairs and Constitutional Development, the Commission recommends that a new ministry dealing exclusively with the matters of local government be created. In the view of the Commission, local government requires much more focused and persistent attention than it has hitherto enjoyed. As indicated in Chapter 1 of this Report, the demands for effective service delivery and the relationship of local government to the two other spheres of government, make it imperative that it should be firmly located in its own ministry.

2.5.8.7 Phasing Out of the Department of Public Enterprises

The department of Public Enterprises is a small department of 39 people which exercises general oversight of State Enterprises. Given that a number of these enterprises are likely to be restructured, the Commission could see no real justification for the expense and dedication of a minister, and staff establishment, specifically to this function, especially as an inter-ministerial committee has been set up in the Office of the Deputy President to exercise general oversight of these matters. It is recommended accordingly that the Ministry and Department be phased-out as soon as possible, and that the six major State Enterprises for which they currently have oversight be transferred to the appropriate line departments as follows:

Transnet which should be aligned with the Department of Transport
Eskom which should be aligned with the Department of Energy and Mineral Affairs
Denel which should be aligned with the Department of Trade and Industry
Safcol which should be aligned with the Department of Water Affairs and Forestry
Alexkor which should be aligned with the Department of Energy and Mineral Affairs
Aventura which should be aligned with the Department of the Environment and Tourism until the arrangements for its restructuring have been completed.

The final accountability and oversight of these should lie with the Department of Finance in all the above cases.

The remaining enterprises whose status is somewhat different from the above six include Armscor; the Industrial Development Corporation; SA Rail Commuter Corporation; SA Post Office; the Atomic Energy Corporation; SA Broadcasting Corporation; Soekor; Mossgas; Abakor; SA Airports Company; Air Traffic and Navigational Services; and Sun Air. It is recommended that the location of these be transferred to the Department of Trade and Industry, or other appropriate line ministries, subject to review by the proposed Organisational Review Agency. Financial accountability and oversight will again lie with the Department of Finance.

2.5.8.8 Executive Agencies within the Office of the President

The Commission has already recommended in Section 2.3.1 above that a number of the existing agencies in the offices of the President and Deputy President be re-configured, and that a number of new units or agencies be created.

These new and re-configured units would include:

The private offices (of the President and Deputy President);
The Office of the Cabinet Secretariat;
The Office of Public Management (which would take on the functions of the DPSA and incorporate the existing offices on the status of women and persons with disabilities);
The Office of the Public Service Commission;
The Coordination and Implementation Unit.

To these units, the Commission proposes to add three additional agencies, as follows:

A coordinating agency for Inter-Governmental Relations (led by a Chief Director), which would deal with inter-sectoral and inter-governmental relations but not local government. This body would take over the coordinating functions currently carried out by the Department for Constitutional Development. Consideration should be given to the question of whether the CIU might usefully take on this role, to obviate the need to set up another separate agency.
An Organisational Review Agency within the proposed OPM to carry out the on-going process of evaluating and re-configuring the structural organs of government. Such an agency should be for a term of three years in the first instance, and its personnel should preferably be drawn from wider civil society in order to enable persons at the cutting edge of management practice to be appointed to undertake the tasks in hand.
An Information Management and Systems Agency, to co-ordinate all public service IMST initiatives. The agency will be led by a Chief Information Officer (CIO), at Chief Director level, who would have a support staff and would interact with the rest of government and the private sector through two new committees which would also need to be established. These are (i) a Policy Committee, comprising senior managers of those departments and/or provinces engaged in general IMST policy as well as including a number of private sector managers; and (ii) a Technology Forum, comprising the IMST Managers from the key user departments and provinces.

2.5.8.9 Intelligence Agencies

The Commission did not consider it timely to look in great detail into the intelligence agencies. We were also advised that the Department of Justice had undertaken a study into these structures. However, the department could not see its way clear to releasing this report to the Commission.

Given that a full enquiry was not possible, we were therefore unable to make detailed recommendations. One of the issues which we would have liked to have discussed is the wisdom of having three intelligence units. Notwithstanding the sensitivity of the subject, we would have similarly appreciated an opportunity to comment on the extent to which transformation strategies for the streamlining of the intelligence services were in place, as well as their efficacy in terms of cost and perceived effectiveness.

A separate inquiry into the structures, management systems and core functions of the Intelligence Agencies is therefore recommended by the Commission.

2.5.8.10 Using Business Process Re-engineering (BPR) in the South African Public Service

The Commission believes that current proposals to restructure the public service will not bring significant changes in numbers employed or methods of work unless such initiatives are part of a more fundamental attempt to re-engineer the business processes of the state. With appropriate business process re-engineering, however, we believe that the public service will be able to meet the national objectives for service delivery while at the same time achieving the targets set down in GEAR. BPR is likely to be the only approach for ensuring that departments overcome their functional parochialism and embrace the "one-stop shop" or "single window" approach to the delivery of service as advocated elsewhere in the report.

The Commission therefore advocates that a Task Team be established by cabinet as a matter of urgency to consider how the business of the public service can be re-engineered. While this Task Team will necessary require BPR expertise, it should involve senior business managers of key line departments to ensure that the BPR proposals are accepted by the state. This BPR Task Team could eventually be located with the Organisational Review Agency proposed in section 2.5.8.7 above.

While the Commission has concerns about the current functioning of the various justice-related ministries and departments (see above), we nevertheless feel that much might be learned from the design and operation of the National Crime Prevention Strategy (NCPS) Model. This was a view supported by public sector participants at our focus groups. The NCPS model is based on a coordinated and multi-sectoral approach (intra-governmental and inter-governmental) to crime prevention, involving a range of government departments (from the obvious justice and security related departments such as Safety and Security, Correctional Services, Justice, Defence and the Intelligence Services to Education, Health, Welfare, Housing, Transport, the DTI, and Foreign Affairs), as well as the private and community sectors. As such it offers a fundamental challenge to many of the narrowly construed approaches to crime prevention, which have tended to focus almost exclusively on action plans within one or more of the departments of the criminal justice system

The current tender should see a new criminal justice process being designed by mid-1998. The tender provides the following:

A business architecture of the 'as is' and 'to be' situation;
An information architecture of the 'as is' and 'to be' situation;
A technology architecture indicating candidate applications and products;
A technology infrastructure;
An implementation plan showing long-term and fast-track projects.

The Commission believes that the above structure can be used on other business process re-engineering exercises. It believes that the value of such an approach is that it starts with the business imperatives, then moves onto information requirements, before grappling with the technological details. Not only does this method ensure that information systems are aligned with business objectives, but by focusing on the business issues initially, it is likely to assist senior management in the public service buy into the re-engineering project.

Another valuable feature of the NCPS model is that it seeks to integrate political leadership and senior management into the project process. This is achieved by a multi-tiered project structure involving all the departments involved. At the highest level, the project is coordinated by an inter-ministerial committee. Reporting to the committee is the User Board for Information Management, Sharing and Process Integration comprising the senior managers of all departments. Each department has an individual champion or structure to ensure that NCPS projects are supported within the departments. The Commission believes that this structure helps bring about greater commitment from the political and administrative leadership.

It is likely that the NCPS re-engineering initiative could result in a significant re-organisation of departmental responsibilities if the senior managers associated with the key departments wholeheartedly embrace the concept. However, it is believed that this will only occur if there is sufficient pressure from above to overcome departmental efforts to maintain their existing structures.

While the NCPS re-engineering project is already in progress and only requires support to ensure that the full implications of the re-engineering exercise are adopted, the Commission also believes that most other public sector functions could be subject to a similar approach. By way of example, we therefore suggest below how some existing departments might usefully be re-organised. It should be noted that this example is merely being presented to illustrate the possibilities of BPR. Ultimately the BPR Task Team would need to examine these options and proposals in much more detail.

Currently the Departments of Transport, Public Works, Housing, Land and Agriculture, Constitutional Development and Water Affairs and Forestry are involved in development and infrastructure delivery at both national and provincial levels. In addition, both Health and Education take responsibility for infrastructure delivery at a provincial level. The Department of Tourism and Environment also has functions which overlap with these areas. Since all these departments have functions dealing with infrastructure delivery and development planning, it is proposed that these functions be grouped into three new Departments.

Firstly, all development and planning functions could be grouped into a Department of Integrated Development Planning. Such a department would incorporate the key development related functions of the national departments of Transport, Public Works, Water Affairs and Forestry, Land (and Agriculture), Housing, Constitutional Development (local government functions) and Environment. The amalgamation of functions would have theoretical or policy implications because it promotes coherent and integrated development planning. This new department would focus primarily on development policy.

The second department, Infrastructure Delivery, would group all the procurement and construction related functions of the above departments. Such an integration would ensure that scarcely available expertise in the field of procurement, public and private partnership relations, infrastructure delivery and maintenance would be concentrated in one department focusing on the implementation of policy. It would also ensure that there was one public sector point of contact with the private sector construction industry.

The third Department, Economic Development, could include all the functions directly related to the development of the domestic economy. This department would therefore take over functions from Trade and Industry, Tourism, Agriculture, Transport, Public Enterprises, Labour, Minerals and Energy and the industrial development functions of the above infrastructure delivery departments.

As noted earlier (in Section 2.5.8.2), the Commission also believes that the foreign trade functions of Trade and Industry should be consolidated with those of Foreign Affairs in order to ensure a more coherent representation of South African interests abroad. We also see a case for amalgamating the Departments of Finance and State Expenditure. The service provision components of the departments of Health and Welfare might be better integrated into a consolidated department of social services. The social security component of Welfare could be combined with the Unemployment Insurance Fund responsibilities of the Department of Labour to create a comprehensive social assistance agency.

In considering these restructuring proposals, it is important to realise that integration needs to involve the integration of all levels of operation in each functional area. In some cases, this will result in 'one-shop-stop' service points for the integrated departments. The imperative for integration however must balance the need to improve functional coherence within the limits of a manageable organisational form and size.

We believe, however, that such integration should also make more economic use of scarce management personnel since functions previously spread across a number of departments will now be concentrated. Since the business of national departments has shifted significantly from service delivery to policy formulation, we feel that such an integration as proposed above will be workable.

Although the Commission realises that such a fundamental restructuring would need fuller investigation by the BPR Task Team, we nevertheless believe that such a re-organisation will not only dramatically improve infrastructure and service delivery but should also create significant opportunities for creative approaches to rightsizing and outsourcing.

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2.6 Provincial administrations

2.6.1 The PRC's Investigation and the Provincial Review Reports

The Commission's approach to the provinces was influenced partly by the existence of the reports by The Task Team Appointed to Investigate Administrative/Managerial Issues Affecting the Provincial Administrations (The Provincial Review Reports or Ncholo Audits). The DPSA task teams investigated all provinces and reviewed a variety of issues, including the provinces' institutional design and capacity to deliver government policy and services. Other issues covered in the review included operational managerial practices and systems, human resource management practices, and financial management systems. All nine Provincial reports were submitted to the Commission in September 1997 by the Minister for Public Service and Administration, Dr Zola Skweyiya. The DG of the DPSA, Dr Paseka Ncholo, also briefed the Commission on the process and outcomes.

The Commission chose not to replicate these detailed studies. At the same time we were not unmindful of the fundamental differences in the respective mandates of the Task Teams and the PRC. We also considered it our duty not to assume the veracity or otherwise of these reports. To that end, we chose to augment these reports with submissions from five provinces, namely, Kwa-Zulu Natal, Gauteng, the Northern Province, the Eastern Cape and the Western Cape. The other four provinces, Mpumalanga, the North-West, the Northern Cape and the Free State, were accommodated through specialist and process studies. This, we feel, gave the Commission a fair overview of the situation in the provinces (further detail on the provinces is provided in chapters 3-6 of this report and the annexures attached to it).

Within the provinces visited and surveyed by the Commission, the thrust of the Ncholo audits was not substantially challenged. This means that, while certain details and factual claims in the reports were queried from province to province, we have no reason to doubt the substance of the Ncholo reports as a whole. The following are some of the core issues and problems raised in the audits:

There is widespread confusion over the different roles of the political and administrative leadership in the provinces. In addition, managers are often not held accountable for service delivery objectives.
A whole range of problems abound in the area of human resources management, the chief of which is the lack of skilled staff and capacity. In addition, there are high vacancy rates, poorly managed disciplinary and misconduct procedures, protracted appointment procedures, and confusion around the Voluntary Severance Packages.
Financial decision-making is over-centralised and funds are generally poorly managed. There is no penalty for over-spending and, as a result, managers do not take financial performance seriously. There is widespread perception that procurement procedures are tedious and unnecessarily bureaucratic and not responsive to departmental needs.
There is a general lack of strategic planning in the provinces and, where it does take place, it is often driven by external consultants.
Information Technology is in poor state due to a variety of factors, including lack of funding for training and the lack of skilled staff. This results in very poor quality of information for management.

These problems were often compounded by the failure of management to focus on delivery requirements, a restrictive rather than enabling regulatory framework, and poor communication, coordination and access to key information.

Through our own investigations, the Commission confirmed many of the problems and challenges highlighted in the Ncholo audits. These were more serious in some provinces than others. Amongst the five provinces evaluated, the Northern Province and the Eastern Cape appear to have the most serious capacity problems. Staff morale seemed low and the leadership appeared to have been overwhelmed by the weight of the challenges facing the provinces. The Western Cape and Gauteng seemed to have functioned better than other provinces, although the Commission did have concerns about the Western Cape's progress with respect to representivity and transformation. It was refreshing, in the case of Gauteng, to be offered not only problems but solutions as well. We would recommend that these solutions are shared with other provinces through the appropriate inter-governmental structures.

During our review of the provinces, we were enormously encouraged by their openness. Officials openly and non-defensively drew our attention to the many problems that exist. This eased the burden of our work substantially. This does not mean, though, that they were uncritical of the Ncholo audits. Their chief concern was that the audits, while fairly describing the situation, failed to locate the problems in an historical context. As a result, the provinces felt that they were unfairly portrayed as "failing" rather than as "battling to cope with the enormous challenges facing them." The Ncholo audits, they therefore felt, were essentially one-sided and incomplete.

Whilst the Commission shares these concerns, we were not particularly surprised by the shortcomings of the Ncholo audits. The task teams had to operate within a very short time-period, and their brief was very much to focus on "what had gone wrong." This was stated openly by Minister Skweyiya, in his public submission to the commission:

"Quite early we did detect that there were problems. I went to different Provinces, found that there were problems and talked to the premiers...About August last year, we travelled with Messrs. Mbeki, Manuel and Moosa to the Eastern Cape and Northern Province and looked at what was happening. All of them maintained there was no problem. And we could not just pick up what was wrong. We knew that there was something wrong. So in the end we decided, generally decided from this Department, that something needed to be done. And despite that quite a number of Provinces were not prepared to accept that politically. It is only now...that they (the provinces) have come out openly and said that there are problems and they need to be assisted in general."

Despite their limitations, therefore, we believe that the Ncholo audits, under tremendous time pressures, succeeded in pointing to real and potential problems in provinces. The data uncovered, however poorly nuanced, is still extremely valuable. What is of equal if not greater importance, however, is the question of what has happened to the recommendations of the task team reports. There is some confusion here. According to the DPSA, in submission to the PRC:

"Cabinet decided that each line Ministry should take responsibility for its corresponding departments at the provincial level and most of the implementation process is taking place at that level."

If the process went no further than this, there would have been cause for concern. Given the enormity of the problems identified in the Ncholo audits, this solution appears too easy a way out. In the light of the challenges faced by many national ministries and departments, the Commission fears that they are likely to give only secondary attention to this task.

As is evident from his submission to the Commission, Dr Ncholo offered a somewhat different account of how the Government proposes to deal with the findings and recommendations of the provincial review reports:

"We meet with the Provincial DG's to deal with the strategic issues. Each province has taken the Report (seriously and) indicated what the problem areas are, what interventions are required, what activities are desirable (and) as a result... has put time-frames (on tasks, stating) who must take responsibility... (This) is what we monitor on a regular basis, looking at every programme and so on... In the provinces where programmes have not emerged and have not been lodged with our office as such, we are actually involved with the donors in trying to ...(determine) levels and areas of intervention."

If the latter reflects current cabinet policy, the Commission wishes to endorse this approach.

Dr Ncholo named Mpumalanga, the Northern Province, and the Free State as the leading provinces in terms of the implementation and the development plans to address the problems identified in the task team reports "The DG of each province takes personal responsibility for ensuring that the recommendations of the Report are implemented at every level," within a time-period of one year.

The Commission also had some concerns about the legality of the Ncholo audits. We could not find any constitutional basis for the intervention by the DPSA into the provinces. Although this is now "water under the bridge," the Commission nevertheless recommends that should such task teams become necessary in future, they should be constituted differently from the Ncholo audits. In particular, any such audits should be conducted by an inspectorate selected by the reconstituted PSC.

2.6.2 Provincial Coordination and the Role of the DG

A number of additional problems cut across the provincial reviews. One is the lack of effective coordination within provinces and the ambivalent role of the provincial DG. It has become imperative that the relationship between the provincial director-general, heads of departments and the head of the premier's secretariat be clarified. The role of the director-general is particularly undefined. Part of the ambiguity stems from the National Government's original conception of provinces as equivalent to national departments (as reflected in the 1994 Public Service Act). The assignment of one director general who is also an accounting officer is symptomatic of this wrong match.

The 1997 Public Service Laws Amendment Act seeks to redress such anomalies, weaknesses and problems, in particular by explicitly recognising each provincial department as a legal entity in its own right. Furthermore, the 1997 Act establishes an original line of authority in that it confers the power of executing authority to ministers and MEC's. This implies that ministers in the case of national departments and MECs in the case of provincial departments will now be (politically) responsible for matters such as internal organisation, appointments, promotions, and career incidents.

Nevertheless, the 1997 Act does not explicitly and satisfactorily clarify the exact status and role of the provincial DG. Whilst it has removed the DG as chief accounting officer, the new Act does not positively define the new role of the provincial DG. Greater clarification is clearly urgent, especially, in the view of the PRC, as it would still be crucial to establish a strategic management and coordination centre in the provincial administrations. The provincial DGs could well play an important role in this context.

The Commission strongly recommends, therefore, that the status and role of provincial DGs be clarified in practice and , if necessary, in law. Whilst the Commission supports the "de-linking" of provincial DGs from chief accounting officer responsibilities, we nevertheless feel that it will be crucial, to avoid possible institutional fragmentation, for them to assume a key coordinating role in the provinces.

2.6.3 Relations between National and Provincial Departments: The Case of the Secretariats for Safety and Security

Other problems emanate from the lack of symmetry between national and provincial governments. Provincial governments departments are not mere duplication of national departments. And yet, one comes across automatic and needless duplication of functions. A notable example concerns the Secretariats of Safety and Security. At a national level, the secretariat assists the minister in the civilian oversight of the police, particularly through its role in monitoring the operational wing of Safety and Security. At a provincial level their functions are much more complex, grass roots and potentially conflictual. There is a perception at national level that the provincial secretariats may be perceived to be interfering with the line functions of the Provincial Commissioners and the operational aspects of policing.

The PRC chose in this respect to deal with the question of broad policy. It examined the degree to which there has been transformation in the process of policing and received submissions from the provinces in respect of all their departments, including Safety and Security. It also met with the MECs in Gauteng, Mpumalanga, and the Western Cape, and discussed the role of the provincial secretariats at national level with the Secretary for Safety and Security, the National Commissioner and the Minister for Safety and Security. In the view of the Commission the provincial secretariats do have a major role to play in assuring civilian oversight of the police, and in monitoring the operational wing of the SAPS, through the activities of community policing forums (CPFs). In the process they can also play an important role in helping to ensure proper representation of communities within the CPFs, and in helping to educate such communities as to their partnering role in the prevention of crime.

As a result of our interviews at national and provincial levels, the Commission recommends that the Department of Safety and Security ensure that proper guidelines are established for the functioning of the provincial secretariats, providing in particular greater clarity as to the roles of the respective partners, and ensuring that a culture of crime prevention is emphasised rather than relying unduly on law enforcement. While the draft White Paper of the Department stresses the significance of local government in the monitoring and civilian oversight of policing operations, the provincial secretariats will continue to have a monitoring role to ensure that local authorities diligently undertake their responsibilities to establish CPFs, and that their functions are competently carried out. Until such time as local government is in a position to undertake the above functions effectively, the secretariats will need to continue their activities.

Such activities will include:

To promote democratic civilian control, oversight and direction of the provincial police services;
To facilitate policy directions for transformation;
To render a support service to provincial offices of Safety and Security;
To initiate targeted crime prevention programmes;
To enhance coordination of departments such as Housing, Education and Welfare as stakeholder partners in crime prevention.

It must, in our view, be understood that the whole concept of community policing is one of partnership which requires mutual trust and co-operation between the police, the public, local authorities and the provincial secretariats. This has been lacking hitherto.

2.6.4 The Issue of Centralisation-Decentralisation

The relationship between the national and provincial governments, regardless of the affiliation of the ruling party, is likely to be tested in future. Throughout our investigations, it became clear that provinces resented being "treated as Bantustans" of national government. While the PRC did not accept that this was the Government's intention, it noted that national government often doubts the capacity of provinces to assume greater responsibility than they have at the moment. This concern is captured in this expression of exasperation by a senior cabinet minister:

"When we all came into government, each and everyone, looked after his [sic] own department and so you don't like... anybody to touch your turf. It became worse with the Provinces. In 1994 all the premiers were shouting: Give me my powers! My powers! And everything. So we had to rush, work very, very fast to devolve powers directly to the Provinces. And from then onward they didn't want anybody from national government. What they expected from national government was money and nothing else but money. And it became very difficult."

In general, the Commission felt that the problem of centralisation/decentralisation should not be posed as a trade-off. An intelligent system of government will, of necessity, include elements of both these trends. The imperatives of national unity, social equality, and overall policy coherence should not be overlooked. The 1996 Constitution provides for a relatively strong system of central government in areas such as security, defence, and macro-economic policy, which implies the need for an appropriate institutional system to support central government in carrying out its constitutional mandate. The Constitution simultaneously opens the way for a substantial decentralisation of functions to provincial and local government. This is reflected in the notion of concurrent powers.

In addition to the Constitution, the National Government has encouraged the principle of decentralised government, particularly through such policy documents as the RDP and WPTPS, and the new Public Service Laws Amendment Act (1997) which was steered through parliament by the MPSA/DPSA. In view of the importance of this matter, a special study was undertaken by the Commission on inter-governmental relations.

Most policy documents offer general statements on decentralisation. However, we believe that its specific meaning and content in relation to the management and administration of core government activities requires greater clarification than has so far emerged. What has become essential is that an appropriate institutional framework be created through which various core functions necessary for more effective service delivery can be moved closer to the points of delivery.

This situation necessitates several measures. In the first place, a common culture must be created and capacities established within which decentralised government can operate. Secondly a decentralisation programme has to be launched. Thirdly, an inter-governmental relations chief directorate needs to be established to promote effective decentralisation.

Decentralisation can operate at a number of levels. In terms of service delivery, this opens the way for developing flexible systems and approaches. Such a system should encourage and co-ordinate the existence of multiple service delivery agencies (e.g. executive agencies) -- with various degrees of institutional independence, responsibility and accountability -- within a common policy framework which applies norms and standards, targets, outputs and outcomes. In terms of management, this may involve full managerial accountability and discretion over critical functions such as expenditure, procurement, staff appointments, salaries and service benefits, and training. This should ideally occur in a context of sufficient checks and balances and oversight -- not only at the level of departments as corporate entities -- but also components within departments which enjoy specific forms of independence from direct, line function control.

Given our earlier comments regarding the Eastern Cape and Northern Province, we urge the Government to maintain constant vigilance over these two provinces. We are concerned that in these cases we are dealing with much deeper problems than may have at first appeared to have been the case. The Commission is also not persuaded that the leadership in the provinces have, at the time of the interviews, come to grips with the enormous challenges facing them, or begun to address the issues concerned satisfactorily.

The National Government should therefore not hesitate, in certain dire circumstances, to resume functions delegated to certain provinces or their departments, where those provinces provide irrefutable evidence of inability to carry on those functions.

Our investigation brought to our attention vividly the fact that in the rush to devolve powers, insufficient attention was given to the capacity of the provinces to assume these powers. It is also sad but true that the unintended consequences of the federal system, and the sunset clauses in the Interim Constitution, have been deleterious to the public service in the provinces. The existence of the provinces has tended (though only temporarily we hope) to consolidate the bloated civil service of the Bantustan and the various apartheid administrations. Furthermore, given the poor financial control culture of some of these former administrations, it is not in the least surprising that the controls currently in place in the provinces are in many ways seriously defective.

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2.7 Building resources and capacity for good governance

The focus of this overview so far has largely been on the structures and functions of government. Given the importance of such issues and the terms of reference of the Commission this is not surprising. However, while the many structural changes we propose above are a vital and necessary part of creating a more efficient and effective system of co-operative governance in South Africa, they will not by themselves be sufficient to ensure the development of a practice and culture of good governance. Other important and related interventions will be essential, therefore, particularly in the areas of human resources development; the effective management of the public service's scarce financial resources; and the development of IMST resources not merely as an important support function but as an integral component of improved forms of governance and service delivery.

These three crucial components of the move towards more effective forms of governance in South Africa are discussed in more detail in chapters 4-6 of this report. What follows is a summary of the main issues and concerns raised during the Commission's investigations, as well as some of the key recommendations for addressing them.

2.7.1 Human Resources Development

The urgent need to develop South Africa's human resources has been stressed in a variety of policy documents, including the RDP White Paper, the WPTPS the Department of Labour's recent Green Paper on a Skills Development Strategy for Economic and Employment Growth in South Africa (1997). Underpinning this urgency are two facts: the first is the growing awareness that "investing in people" is the most productive investment a country or organisation can make; and the second is the realisation that South Africa currently ranks last out of 46 countries (at a similar stage of development) in terms of its human resources development performance (World Competitiveness Yearbook, 1996), a fact that is attributable in the main to the legacy of apartheid.

With respect to the public service, the WPTPS stresses that the effective mobilisation, development and utilisation of human resources is not only an important transformation goal in its own right, in building individual and institutional capacity for good governance, but also critical for the success of the transformation process more generally. Accordingly, a coherent and holistic strategic framework for human resource development will need to be developed at both national and provincial levels. This will entail a number of related elements, including:

The elevation of the role and status of human resource development within the overall framework of government policy;
The development of effective and lifelong career development paths for all categories of public servants;
The improvement in employment conditions;
The introduction of effective performance management and appraisal systems, and the use of incentives to reward individual and team performance;
The basing of promotion and career advancement on performance rather than on seniority or qualifications.
The introduction of effective systems of staff development and training for all public servants, within the context of a national training strategy;
The introduction of affirmative action strategies to improve the representativeness of the service, so that it can draw upon the skills and talents of all South Africans, and derive the benefits of the broader perspectives that a more representative service will bring.

Since the publication of the WPTPS, a number of additional policy papers and documents have been produced by the Department of Public Service and Administration (DPSA) which have an important bearing on human resources management (HRM) and development (HRD) in the public service. These include:

The White Paper on Transforming Service Delivery (1997);
The White Paper on Public Service Training and Education (1997);
The Draft White Paper on a New Employment Policy for the Public Service (1997);
The Green Paper on a Conceptual Framework for Affirmative Action and the Management of Diversity in the Public Service (1997); and
The Green Paper on A New Law for a New Public Service: Policy Proposals for a New Public Service Statute (1996).

In addition to developing these far-reaching policy documents, the government has also taken steps to clarify the role of key implementing structures in the human resources field, and notably the DPSA, the Public Service Commission (PSC), and national departments and provincial administrations. Under the 1997 Public Service Laws Amendment Act, departments and provinces will assume much greater responsibility for human resources matters than previously. The details of the devolution of managerial responsibility and accountability for human resources matters are spelled out more comprehensively in the recently launched White Paper on Human Resources Management in the Public Service. The White Paper sets out a framework under which departments and provinces will to a large extent determine their own human resources policies and practices, and under which line-function managers will be expected to take on much more responsibility than hitherto for the human resources function. Human resources management will therefore no longer be the sole responsibility of personnel practitioners, but rather will become a core competency for all public service managers.

2.7.1.1 Issues and Challenges

Whilst significant, albeit variable, progress has been made across the public service towards the objectives for human resources development laid down in the WPTPS (as shown in detail in Chapter 4), a number of important challenges remain. Some of the main issues and problems raised during the Commission's investigations included the following:

The fragmented and un-coordinated approach to HRD across the public service, resulting in the absence of resources and accountability for ensuring that public servants are empowered and developed to take on the challenges they face.
The lack of a strategic, needs-based, outcomes-based and competency-based approach to HRD, directly related to the developmental needs of the public service as outlined in the RDP, the WPTPS and other related policy documents.
Lack of effective systems for strategic planning and review of HRD.
The relatively low priority still accorded to HRD in some departments and provinces, illustrated by the fact that HR functions are often led by lower grade officials (Assistant Directors and Deputy Directors), with little or no direct access to strategic decision-makers.
The lack of funding for HR, and the effective management of HR budgets.
The lack of coordination and communication.
The limited use of performance management systems.
The persistence of discriminatory barriers to access and entitlement, in terms of recruitment, promotion and access to staff development and training opportunities.
Limited progress in achieving representivity at the senior management level, particular in relation to gender, at the technical and professional levels (in relation to both race and gender), and at all levels in relation to disability.
Inflexible and discriminatory rules and regulations (The Staff Code and PAS) which rendered a flexible approach to HRD difficult.
The inappropriate nature of the training and education that is provided by many in-service and external providers.
The low priority accorded to training and eduction in many departments and provinces, and the low level and uneven nature of provision.
Problems with the role of the South African Management and Development Institute (SAMDI).

2.7.1.2 Observations and Recommendations

The transformation of human resource practices in the public service is critically important in building skills and capacity for good governance, and needs to be given greater priority and to be systematically integrated into broader departmental policy and strategic plans, as well as into the budget cycle.
The strategic importance of human resource management and development should be reflected in the status and reporting lines of the responsible human resources managers. Currently many human resources managers operate at the middle management level, with no direct links to the strategic decision-making processes. This situation must be reversed by rasing the status of such managers and establishing direct lines of reporting to the Head of Department.
Clear guidelines as to what human resource planning entails should be developed by the DPSA/OPM. The DPSA should also consider including guidelines on policy formulation and implementation with respect to human resources in the proposed management guides which will shortly replace the public service staff code. It will also be necessary for the DPSA to assist departments in developing an approach or formula for determining the ratio of the HR budget to the overall departmental budget.
All managers, including line-function managers, must be trained to understand the importance of human resource planning, management and development, particularly in the light of the responsibilities that will be delegated to managers under the 1997 Public Laws Amendment Act and the recent White Paper on Human Resources Management.
Departments should utilise multi-year planning cycles. The Medium Term Expenditure Framework (MTEF) provides an opportunity for rationalisation of human resources planning. Amongst other things, this will cover succession planning, career pathing and representivity imperatives.
The role of provincial Corporate Services units in human resource development should be focused on the provision of advice and support in planning and capacity building. This will include consistent reference to the strategic priorities of the province in identifying the broad training and development programmes.
A holistic human resources development strategy needs to be developed by departments and provinces, with clear development planning, career paths, training opportunities, staff retention policies and accelerated development mechanisms targeted at the most disadvantaged within the public service, as well as at those who are being recruited to redress the racial imbalances at the more senior levels.
A systematic review also needs to be carried out by departments and provinces (with support from the DPSA/OPM) of current recruitment, promotion, training and development practices in the public service, with a view to determining how these may discriminate against Black people, women and people with disabilities. This should form the basis for the formulation of more effective AA strategies.
Existing legislation needs to be revised and new legislation introduced to promote affirmative action. Effective mechanisms will need to be put into place to ensure that such legislation is adhered to. Laws against sexual harassment in the workplace should be enacted and implemented.
All public service departments and agencies should be required to draw up effective affirmative action and employment equity policies and strategies, particular in relation to gender and disability.
Strategies specifically targeting the disabled as a disadvantaged group would have to include specific recruitment and selection strategies at different entry levels; staff development and training; career pathing; the necessary modifications and adaptations required to provide an adequate working environment for the disabled; as well as plans for improving service delivery to people with disabilities outside the sphere of public service employment.
AA plans and programmes should be accurately costed and appropriate budgetary provision made, within the context of the new approaches to budgeting and costing proposed in Chapter 5 of this report.
The introduction of performance-related contracts for Heads of Departments (as recommended in the WPTPS and strongly endorsed by the Commission) should include specific AA targets (particularly in relation to gender and disability), thus giving HODs the necessary incentive to take a more proactive approach to affirmative action and representivity.
Awareness training for senior managers should be introduced to enable them to plan and implement effective strategies for women and the disabled in particular. This should be part of a broader awareness campaign both inside and outside the public service.
Special programmes, such as valuing and managing diversity, should form part of public service affirmative action strategies to prevent the "old" bureaucratic ethos perpetuating itself as new candidates are recruited to the service. A change in ethos is critical to changing the public service into an effective, efficient and representative arm of government.
AA strategies should also address issues of social class. A wider focus is called for to address the needs of the most deprived and subordinate sections of the public service to provide them with more effective skills development, career pathing opportunities, and the means for upward mobility.
Monitoring and evaluation of the transformation process should take place on a regular basis to enable departments to assess the extent to which change is taking place. This should go beyond the monitoring of figures relating to representivity by examining qualitative changes in the environment, practices and processes of the departments.
The importance of Human Resources Provisioning (HRP) should be more widely recognised and acknowledged within departments, and its current "Cinderella" status significantly enhanced. The systematic planning of HRP should be improved and linked to broader strategic policies and plans for HR, service delivery and representivity. This will be particularly important given the current move the decentralise human resources management functions to departments and provinces.
Clear HRP policies and procedures should be developed by departments and communicated to staff at all levels. Recruitment, selection and advertising policies should be designed to attract the best candidates possible from the widest pool, whilst at the same time enabling departments to promote a possible external image of themselves as a progressive and caring employer.
All actual and potential recruiters (including line managers where appropriate) should be trained in how to recruit, interview and select candidates in a way that empowers rather than disempowers candidates.
Comprehensive induction processes should be developed and introduced for all new staff. Probation should be more actively managed to enable new incumbents to familiarise themselves quickly with their environment and their jobs.
The DPSA/OPM should initiate a broad-based discussion of the various models of performance management available to ensure accountability and coordination across the public service. A comprehensive management development programme should be initiated, not to train managers in one system or model of performance management alone, but to introduce them to a variety of mechanisms for coordinating work and improving performance.
A phased approach to performance management should be adopted, linked to the overall transformation of the public service, and the specific transformation and service delivery goals of individual departments and provinces. The responsibility for this process should lie either with Heads of Departments or be located in the HOD's office.
There is need for departments to exercise greater flexibility in the sourcing of training and education. If departments conduct needs assessments systematically and consistently, it should be possible to fully rationalise the role of SAMDI and other training and development providers, along the lines recommended in The White Paper on Public Service Training and Education (WPPSTE).
The South African Management and Development Institute (SAMDI), as currently constituted, does not have the capacity to effectively undertake the on-going process of public management training; accordingly its staffing and infrastructure should be rationalised and its role and location clarified. One possibility is that SAMDI could be incorporated as a training and education unit in the proposed Office of Public Management.
The Commission recommends that SAMDI should cease over time to be a direct provider of training, and confine its functions instead to ensuring that public management training needs are met by other appropriate providers, especially the Schools of Public Management at tertiary institutions, but also including competent training providers in the private and NGO sectors. It should also oversee the maintenance of high standards befitting the requirements of a professional civil service.
Consideration should also be given to transforming SAMDI into a Sector Education and Training Organisation (SETO) for the Public Service (as proposed in the WPPSTE), with a key role in the strategic planning, coordination and accreditation of public service training and education.
There is a general need for the development of a comprehensive set of training and education programmes by each department. This would ideally be based on needs assessment, linked in turn to the strategic priorities of the department, and integrated into the budget planning process.
There is a need to standardise the involvement of line-function managers in determining training and development programmes. This is related to the integration of human resource development into the broader planning cycles of the department.
In addition to in-service training and education and formal courses, there is a need to increase the use of secondment and other informal staff development initiatives (such as work shadowing and mentoring) as a strategy for rapid skills development, especially in areas of critical shortage.
Systematic use of benchmarking should be introduced in departments in line with the competency-based approach to human resource development envisaged in the National Qualifications Framework.
For lower grade workers, it will be critical to utilise linkages with the National Qualifications Framework for developing career management and succession planning.
The urgent need for an assessment centre or assessment processes is indicated by the career management and succession planning imperatives indicated in the White Paper on a New Employment Policy for the Public Service.
In line with the proposals in the WPPSTE, the Commission recommends that a formula for departmental training and education budgets be developed by the DPSA, in collaboration with the Department of Finance.

2.7.2 Budgeting and Financial Management

Financial planning and budgeting is crucial because it is concerned with the allocation of scarce public resources (financial and human) in such a way that policy priorities are realised. If the policy and strategic planning processes are not fully synchronised with the budgetary and financial processes, the likelihood is that policies will be introduced without the necessary funds or capacity for their successful implementation, with the attendant risk of popular frustration and unrest Sound financial management is also vital as a necessary complement to the budgeting process, and in particular to ensure that taxpayers' money is used in an efficient, cost-effective, responsive and accountable way.

When proposing changes to the way the government and the public service functions it is important to have a clear understanding of the relation between budgeting, policy objectives and human resource issues. Proposals regarding the one cannot be dealt with in isolation from the others. To start with, the fiscal constraints faced by government are largely fixed (through commitments made in GEAR and by available revenues). Obviously the Cabinet needs to prioritise what it wishes to do (deliver) within such constraints. Once this has been decided, and translated into specific delivery output targets for each of the departments, it is then a matter of deciding what mix of inputs are needed to produce the outputs specified. A very important component in this mix of inputs is personnel. Personnel are a major expense for nearly all department and it is therefore imperative that every post (and person in the post) fulfils a specific role in ensuring the effective delivery of the specified outputs. For this reason it is imperative that control over posts, job descriptions, remuneration and over hiring and firing be devolved to departmental managers that are responsible for the delivery of department's specified outputs within the set of budget constraints. Failure to devolve the responsibility will create a situation where managers are responsible for budgets and outputs but do not have control over a major input as well as a major expense item on their budgets.

The international experience shows that financial and budgetary reform, buttressed by wider public sector reforms, can significantly improve service delivery and restore government's credibility among domestic citizens and overseas investors. In fact, in an increasingly integrated global economy, good fiscal management itself constitutes a competitive advantage.

2.7.2.1 Issues and Challenges

Chapter 5 of this report demonstrates in some detail the substantial progress made since 1994 in South Africa towards budgetary and financial reform (particularly though not exclusively through the introduction of the Medium Term Expenditure Framework) and indicates that further legislative and policy changes are in the pipe-line to build upon and consolidate the achievements that have been made. Whilst the Commission acknowledges and applauds such progress, its investigations have revealed a number of outstanding issues and challenges that still need to be addressed. These include:

The reliance on incremental budgeting which focuses on inputs rather than outputs; this means that budgets concentrate on where money will be spent rather than focusing on results ( what has been achieved with public funds, and what value for money has been achieved). As a result, cabinet and parliament are not fully informed of the service-delivery consequences and financial implication of policy decisions
The lack, therefore, of an effective system for performance or results-oriented budgeting that is strategically linked to the planning processes for service delivery.
The use of out-dated forms of costing and accounting systems which make it difficult to disaggregate and identify the true costs of inputs and programmes, and which therefore inhibit effective planning.
The format of budget documentation is complicated and inaccessible. It does not provide Cabinet and other policy makers with sufficient information to accurately weigh up the cost implications of new policy proposals.
The budget is therefore not used as a management tool which allows public managers to know up front what the outputs of service delivery will be.
The almost total lack of popular participation in the budgetary processes.
The lack of effective parliamentary oversight over the budget process.
The persistence of "unfunded mandates" (new or additional spending obligations arising from policy decisions when the source of funding for the additional cost has not been made explicit).
The lack of clear and well-coordinated structures within the National Cabinet and provincial EXCOs for the management, coordination and effective political oversight of budgetary and financial matters, and in particular for the effective integration of the strategic planning and budgetary processes.
Continuing weaknesses (including mismanagement and corruption) in financial management and administration, compounded by the lack of an effective ethos of probity within the public service, the lack of accurate records and information, and the lack of effective monitoring, control and disciplinary procedures.
The need for the structures that exist to promote inter-governmental relations in the budgetary and financial fields (such as the FFC, the Budget Council, and the Intergovernmental Forum) to improve the coordination of sectoral programmes with national and provincial budgets.
The lack of appropriate incentives to line managers to encourage them to exercise responsibility and ensure accountability for outputs and outcomes (in line with national priorities, norms and standards), matched by increased flexibility in regulations governing the employment of staff and the procurement of inputs.
The lack of timely financial management information means that managers cannot compare actual expenditure and delivery progress with planned expenditure and delivery. They cannot therefore take pro-active steps to pre-empt potential bottlenecks.
An over-centralised and over-bureaucratised system of tendering and procurement which inhibits a prompt and flexible approach by line managers to service delivery;
The lack of effective IMST systems and support (see the section on IMST below), which are vital for sound budgeting and financial management;
Difficulties in recruiting and retaining qualified personnel in the financial field (especially amongst Black people and women), compounded in the public service by competition from the private sector.

2.7.2.2 Observations and Recommendations

The Commission recommends that a Finance Committee be established as a sub-committee of cabinet to promote the effective integration of the strategic planning and budgetary processes, and ensure effective political oversight of them. This committee would be chaired by the Minister of Finance, and its decisions would take the form of recommendations to full Cabinet.
Similar finance committees should be established in the provinces. These would be chaired by the MEC for Finance and would report to the provincial EXCO.
Appropriate technical planning committees should be established to support the work of these finance committees at both the national and provincial levels. These should work closely with the Cabinet Secretariat, the new Coordination and Implementation Unit, and officials from Finance and State Expenditure, to ensure greater integration between the planning and budgeting processes.
Reforms should take place in the structures of inter-governmental relations, in line with recommendations contained earlier in this chapter, to facilitate the more effective reconciliation and harmonisation of national and provincial priorities, and the coordination of sectoral programmes with national and provincial budgets.
A Task Team should be appointed and headed by the Minister of Finance to draw up plans and options for a Performance Based Programme Budgeting (PBPB) system, on which the MTEF will based, for discussion and approval by the extended Cabinet (cabinet ministers and provincial premiers). Support from the extended Cabinet should signal political commitment at the highest level for the introduction of this new budgetary approach.
This PBPB system be based along the lines proposed in Chapter 5 of this report. The PBPB system will link service delivery outputs of departments and their broader impacts on society (outcomes) to the public resources used to generate them. Policy makers will be provided with better information on which to base decisions and plans. So too will public service managers, parliament and the provincial legislatures, and civil society.
To facilitate the implementation of the PBPB approach to budgeting, a system of activity-based costing be devised and introduced throughout the public service, to replace the current system of resourced-based costing. Such a system will be designed to ensure that all the input costs associated with a particular programme can be identified, that the analysis of estimated future costs of such inputs is used effectively to forecast future programme costs, and that the MTEF based on the new approach to PBPB reflects the true cost of service delivery.
Current computerised systems should be modified and up-dated to provide the necessary information required by activity-based costing. Appropriate guidance, support and training should also be provided to ensure the success of this new costing system.
In the longer-term serious consideration be given to the phased introduction of an accrual accounting system to replace the current and flawed system of cash accounting.
When new norms, standards, programmes or policies that have cost implications for one or more spheres of government are adopted outside the normal annual budgeting process, the financial implications should be presented to Cabinet/EXCO as part of the decision-making process before final approval is given.
Policy should never be approved without accurate costing.
To promote more effective managerial responsibility and accountability, the current move towards performance-related contracts for heads of department should be expedited (and extended to cost centre managers within departments) to promote greater managerial responsibility and accountability for results. This will also involve the formulation and implementation of appropriate performance measures, the introduction of more effective monitoring systems, legislative and other changes to afford managers the necessary flexibility over recruitment and procurement procedures, and the provision of guidance and support to enable managers to exercise their decentralised powers efficiently and effectively.
The role of the National Parliament and provincial legislatures in the budget process should be enhanced, inter alia, by modifying the timing of the budget cycle to allow additional time for parliamentary scrutiny and oversight; by revising the format of the "White Book" of budget estimates to furnish MPs/MPLs with as much relevant information in as accessible a manner as possible; and by instituting effective capacity building programmes for parliamentarians and their support staff.
More structured opportunities should be created for popular debate and involvement in the budget process, and more time should be structured into the process to allow for public hearings by the relevant national and provincial financial committees. Budgetary information should be provided in a more accessible, timely and user-friendly form.
The National Government and each provincial government should establish a Programme Review Unit, most probably within the Finance or State Expenditure Departments. Such a unit will help to create a coordinated framework for conducting programme reviews and administrative efficiency reviews.
Each department or agency should be required to produce an annual report that would include, inter alia, an account and assessment of service delivery over the year (against planned outputs and outcomes), with an associated cost analysis.
As the Auditor-General's traditional role as the watch-dog of procedural financial control will be diminished under the new budgetary system, the role of the AG should be re-focused on the performance evaluation of all key service delivery departments at national and provincial level.
Priority should be given to reforming the fundamentals of finance administration, particularly in relation to systems for financial and payroll controls, cash management, and asset and liability management.
Task teams, organised by the DPSA/OPM and the Department of Finance, should be established to work with departments and provinces in developing and strengthening their capacity in the area of financial management. In particular such teams will assess the effectiveness of current systems, processes and capacities; identify specific changes, training and other support required; provide appropriate "on-the-ground" training to key staff on new systems or processes, or on existing processes that are not currently fully utilized; and develop, in conjunction with departmental and provincial staff, a written financial reference guide that provides a detailed step-by-step description of standard processes as a further aid to staff training, development and awareness.
The Commission endorses the decentralised approach to procurement proposed in The Green Paper on Procurement Policy, but recommends that a phased and gradual approach to implementation be adopted. This may well entail the retention of the Tender Boards whilst capacity to operate the new system is developed.
Appropriate guidance and support should be provided to departments/provinces to assist them in balancing the needs for cost-effectiveness in procurement with the broader socio-economic aims related to the development of SMMEs (who presently win only a very small proportion of tenders, despite the Government's commitment to Black empowerment).
The Commission recommends that a major development and upgrading of IMST takes place, in line with recommendations in Chapter 6 of this report, to assist the processes of reform and performance in the public service in general, and in the areas of budgeting and financial management in particular. This is to overcome the current situation where much of the data necessary for accurate and effective costing is lacking.
More specifically, systems such as FMS and PERSAL be supplemented by a system of financial management and monitoring designed to generate regular reports on service delivery and associated expenditure. The focus of such reports should be on areas such as expenditure patterns, service delivery and performance measures and indicators.
A major investment in human resources development needs to take place in line with the recommendations in Chapter 4 of this report, and within the new framework recently laid down by the White Paper on Public Service Training and Education. This will be vital to ensure that the necessary skills and capacity are built for the new systems of budgeting and financial management proposed above.
In this regard, special attention will need to be focused on issues such as the recruitment and retention of capable staff; changes in the post classification and salary structures to ensure that competitive salaries are paid for those staff whose skills are in scarce supply; and the recruitment, training and fast-tracking of officials from previously under-represented groups.

2.7.3 Information Management, Systems and Technology (IMST)

The Commission noted in its hearings that there is a growing awareness of the vital role that information management, systems and technology (IMST) can and should play in the processes of public service reform and consolidation, not merely as an important support function but as an integral component of improved forms of governance and service delivery. Technology and systems have been used for transaction and control purposes in the South African public service for many years. In many cases -- such as the transversal financial and personnel management systems (FMS and PERSAL), the case management systems used by the Police, the motor vehicle registration systems used by Transport, the pensions and unemployment insurance systems used respectively by Welfare and Labour, and the subsidy management system used by housing -- the use of IMST is now essential. In these circumstances, what matters is whether these systems work properly. It is not a question of whether or not to have IMST, but whether we have good or bad IMST.

In recent years the use of IMST has extended to developing management information systems to assist senior management in their strategic management and policy roles. Although many of these systems build on the base transaction and control data systems mentioned above, they have been coupled with more general policy-oriented databases. IMST is also being used increasingly to deliver services directly to the public. Indeed in the international arena this is currently one of the most exciting developments in the IMST field. The range of services that can be delivered directly using IT include information and transaction kiosks which enable citizens to access their Government institutions 24 hours a day. The also include advances in IT-enabled medicine and education where international expertise can be delivered to remote areas via Internet technology or equivalents. Although South Africa has yet to advance very far along these avenues, it is likely that IMST enabled delivery will become an option in the near future.

2.7.3.1 Issues and Challenges

From the Commission's hearings, investigations and studies into this area, we are convinced that there is quite a high level of awareness and understanding among senior managers in the public service about the need for and uses of IMST. But current systems and technology applications in the public service cannot, in their current form, come close to meeting the requirements of the new South Africa. The problem consists of two realities:

The huge financial resources that the country has already invested in technology and systems;
The dire need for the public service to leverage this investment in its quest for transformation.

This massive investment has been made in a highly fragmented manner and economies of scale are not being realised. The hearings conducted by the Commission have highlighted the fact that a huge cost has been borne by the South African public without any appreciable benefit in the form of greater service delivery or a more efficient and effective public service. Perceptions gathered from state officials also indicate that the current IT assets are not regarded as contributing significantly to service delivery or transformation objectives. In most cases, both the public and officials believe that current systems and technology may even act as a major constraint on realising these objectives. In an area of human endeavour that demands that individuals acquire knowledge and skills as an on-going process, the public service has not benefited appreciably from the billions spent, nor does it have any significant pool of skilled IMST resources.

During its investigations into the role of IMST the Commission became aware that a number of government departments (notably the DPSA and the Department of Communications) are working towards a vision and policy for IMST in government (see Section 6.2 in Chapter 6 for more detail). Notwithstanding the worthy efforts of such departments, there are a number of important problems that are currently preventing IMST from making the kind of contribution to public service performance and reform that it could and should be making. These include:

The lack of commitment throughout the public service to buy-into such a vision;
The absence, therefore, of an overall IMST strategy and implementation plan for the public sector;
The widespread use of incompatible platforms, networks and applications;
The lack of a coordinated approach to the use of IMST;
The lack of information sharing;
Unnecessary duplication of functions and systems between line departments and provinces;
The low level of investment in IT training, especially for Black people and women;
The lack of executive and senior manager awareness;
Problems in procurement.

2.7.3.2 Observations and Recommendations

The Commission is of the view that IMST should be driven primarily by the business objectives of the state, and not the other way around. Although IMST can significantly change the manner in which the public service conducts its business, we believe that this transformation must be shaped by the strategic and operational requirements of the public service, particularly in relation to the provision of efficient, effective and equitable service delivery.
The Commission therefore strongly supports the position that all important decisions regarding IMST should come from the senior political and managerial leadership of the state and not be delegated to the technologists.
There should be an immediate procurement moratorium on all large (above R5 million) information management systems and technology. This would be designed to create the political will to get the public service to agree on some basic standards to facilitate future data exchange and inter-operability.
It is proposed that the process to agree upon such basic standards be driven by an Inter-Ministerial Task Team and involve all affected departments and the provinces through focus group and working group structures.
The most immediate need would be for standards required for exchange of information between different systems. The unique identifier plays a crucial role in that respect, but network standards will also be required. Common formats for electronic exchange of information between government and private institutions, companies as well as the public should also be established based on Internet related techniques. A programme for establishing other standards would need to be agreed by the inter-ministerial task team. Ultimately however, there would be a need for a more holistic business, information, systems and technology architecture for the public service.
The Commission proposes that the above projects should be consolidated into a national information management strategy, information systems strategies and an information technology strategy for the public service. Such a strategy would of course need to be in line with any national information society strategy for the nation as a whole.
It is proposed that a Chief Information Officer (CIO) be located in the Office of the President to co-ordinate all public service IMST initiatives. The CIO would have a support staff and would interact with the rest of government and the private sector through two new committees which would also need to be established. These are A Policy Committee, comprising senior managers of those departments and/or provinces engaged in general IMST policy as well as including a number of some private sector managers; and a Technology Forum, comprising the IMST Managers from the key user departments and provinces.
In developing the above standards, architectures and strategies, the Commission proposes the acceptance and introduction of the lead agency concept whereby a particular state agency would be given primary responsibility to co-ordinate a whole-of-government IMST initiative in relation to a specific set of IMST functions in conjunction with other participating departments. In order to ensure inter-agency co-operation, personnel and resources would need to be shared on a programme and/or project basis, but ultimately the Minister and Senior Management responsible for the lead agency would be held accountable for performance.
Coupled with the lead agency concept, which is largely a short-term measure, the Commission proposes that in the medium to longer term the current functional differentiation of the public service be addressed on the basis of business process re-engineering (see Section 2.5.8.10 above).
In order to address the critical skills shortage in IMST in the public service, the Commission proposes that a systematic skills development plan be designed and implemented to train new entrants to the information management and technology field. This will entail in particular a new four year internship programme which would lead to an accelerated but nevertheless equivalent qualification to those currently offered by tertiary institutions. Although this programme would be open to all, special emphasis should be given to seeking interns from historically disadvantaged communities to ensure that representivity is addressed.
The implementation of electronic government is probably the best way to build capabilities that enable the public not only to access information but to conduct transactions with government departments. The Commission therefore recommends that government give serious consideration to migrating to completely electronic communication within the next five years.
The Commission proposes that new procurement models be used in the development, operation, maintenance and upgrading of information management system and technology. We suggest that avenues be explored to ensure that risks and rewards are appropriately shared between the public and private sectors.
The Commission believes that emergency measures have to be undertaken immediately to ensure that the systems are Year 2000 compliant. A 'Crisis 2000' project office should be convened immediately to coordinate and project manage all the Year 2000 initiatives in the public service in liaison with similar private sector initiatives and projects.

Chapter 3: Transforming the structures and functions of government

Introduction
Managing the size of the Public Service

3.1 Introduction

3.1.1 A New Vision and Mission for the Public Service

The public service inherited by the new Government in 1994 was designed primarily to promote and defend the social and economic system of apartheid, and was geared to serving the material needs and interests of the minority. Structured along mechanical, closed models of public and development administration, the principle features of the apartheid bureaucracy included:

Rigid racial and ethnic segregation;
Fragmentation, duplication and waste;
Poor and outdated management practices;
A regulatory bureaucratic culture;
Lack of accountability and transparency;
Poorly paid and demotivated staff;
Conflictual labour relations.

The new Government's commitment to reconstruction and development, national reconciliation, and democratisation and community empowerment placed considerable emphasis on the need for the transformation of the public service from an instrument of discrimination, control and domination to an enabling agency which serves and empowers in an accountable and transparent way. To this end, and as seen in Chapter 2, the Government adopted in the White Paper on the Transformation of the Public Service (WPTPS) the following vision for the public service:

"The Government of National Unity is committed to continually improving the lives of the people of South Africa by a transformed public service which is representative, coherent, transparent, efficient, effective, accountable and responsive to the needs of all."

In pursuit of this vision, the Government developed the following mission:

"The creation of a people centred and people driven public service which is characterised by equity, quality, timeousness and a strong code of ethics".

In moving towards this vision, the Government identified the following eight priority areas for public service transformation:

Transforming service delivery to meet basic needs and redress past imbalances
Rationalisation and restructuring to ensure a unified, integrated and leaner public service;
Institution building and management reforms to promote greater accountability and organisational and managerial effectiveness;
Representativeness and affirmative action;
The democratisation of the state;
Human resource development;
Improving employment conditions and labour relations;
The promotion of a professional service ethos.

The above vision and mission statements were premised on a fundamental re-definition of the role of the state and its relationship with civil society, based on a partnership between them rather than the antagonistic relations that had prevailed in the past. They were also consistent, as noted in Chapter 2, with the provisions of the Interim Constitution and the RDP.

Chapters 3 and 10 of the New Constitution (1996) took this process further by making provision for an integrated, inter-sectoral, and cooperative approach to governance. These provisions commit government in all spheres to be transparent in policy making and inclusive in its approach.

3.1.2 The Meaning of Transformation and Reform

In the WPTPS, transformation was defined as a dramatic, focused and relatively short-term process, designed to fundamentally reshape the public service for its appointed role in the new dispensation in South Africa. As such it could be distinguished from the broader, longer-term and on-going process of administrative reform which will be required to ensure that the South African public service keeps in step with the changing needs and requirements of the domestic and international environments. Whereas the goals of transformation are to be achieved within an anticipated timescale of two to three years, the process of administrative reform will be ongoing.

The WPTPS stressed, however, that the change process need not and should not be based on an over-simplified dichotomy between radical once-off transformation on the one hand and incremental reform on the other. In fact there will be a need to combine transformation in some areas with more gradual piece-meal reform in others. What is really needed is an approach which is strategic, yet pragmatic and feasible.

3.1.3 Changes in Structure and Function

In pursuing the above vision and mission, the Government opted for a "strategic change management" or "strategic-developmental" approach to administrative reform, rather than traditional bureaucratic models or neo-liberal models based on the restructuring and increasing contracting-out of state services. This approach was regarded as the most appropriate given the principles, goals and underlying values of the RDP and the needs of the society in this phase of transition and transformation. The adoption of this approach had important implications for both the functions and structures of the public service in the new South Africa. At the functional level, it involved the move towards a service that is:

Needs-based, designed to meet the needs of all citizen-customers rather than those of a small minority, or the needs of the bureaucracy itself;
Mission-driven and results-oriented, focusing on goal-based service and results and outputs;
Strategic in focus, where the emphasis is placed on strategic planning to achieve desired goals amd to anticipate and prevent problems rather than responding by way of crisis management when they occur;
Based on a facilitative rather than controlling state, to mobilise the potential of civil society, rather than relying exclusively on public sector resources, thereby empowering citizens to share in the responsibilities of governance;
Committed to quality, through the effective management of the quality of services rendered to ensure excellence and equity in provision, as well as value for money for both the state and taxpayers.

At the structural level the strategic change management approach involved a major shift from the former mechanical model of public and development administration (with its emphasis on centralisation, hierarchy, the procedural observance of rules and regulations, and insulation from the public) towards a more organic, integrative and adaptive model of corporate governance -- with an increasing emphasis on:

The decentralisation and devolution of decision-making power;
The corresponding strengthening of managerial responsibility and accountability for results;
The democratisation of internal work procedures;
The establishment of flatter organisational structures;
The introduction of improved forms of cooperation and coordination (both vertical and horizontal);
The development of team work and a project or programme-based approach to work;
The development of new forms of task-related rather than rule-based cultures; and
The incorporation of civil society bodies into the governance process.

3.1.4 Purpose and Structure of the Chapter: Evaluating Progress Since 1994

The purpose of this chapter is to examine and evaluate the progress that has be made since 1994 towards the achievement of the structural and function requirements of the strategic developmental model of governance advocated in the WPTPS, and the related model of cooperative governance outlined in the 1996 Constitution. As such, a degree of overlap with the previous Overview chapter will be unavoidable. However, this chapter will be able to explore some of the issues raised in Chapter 2 in greater detail, as well as introducing a number of new themes. Repetition between the two chapters will be kept to a minimum.

The chapter is organised into the following sections:

Managing the "size" of the public service;
Strategies for managing transformation;
Managing the machinery of government decision-making;
Reconstituting the Public Service Commission;
Management approaches, cultures and practices;
Managing service delivery;
Managing institutional performance.

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3.2 Managing the size of the Public Service

3.2.1 Introduction

The question of the appropriate role and size of the state has been brought into the public spotlight in South Africa by controversies surrounding such issues as the rationalisation of education, the discovery of thousands of "ghost" workers, and the handsome severance packages paid out to former civil servants. This has sparked a public debate as to whether the Government's present policy of rightsizing is effective, feasible and in the interests of economic growth and social development.

Given the bloated, fragmented, and inequitable nature of the apartheid public service, it is not surprising that a broad consensus emerged in the post-1994 dispensation on the need for a much more efficient, effective and equitable use of resources, tied in particular to improving the quantity and quality of service provision and redressing the imbalances of the past. It was also encouraged by global trends towards rightsizing, privatisation and the achievement of greater competitiveness, quality, efficiency and cost-effectiveness in public service provision. Within this broad consensus, divergent views and points of emphasis have emerged, however, on the most appropriate ways of promoting cost-effectiveness, and in particular on the purpose and role of "rightsizing."

3.2.2 The Policy Context in Regard to Rightsizing

3.2.2.1 The RDP and the White Paper

The RDP White Paper (November 1994) and the WPTPS both emphasised the need to reduce consumption expenditure as a proportion of total government spending, and to reduce the wage bill as a proportion of consumption expenditure. The rationale was not merely to save money, but rather to release resources for productive investment in RDP-related initiatives. For this reason it would be vital to ensure that strategies for creating a leaner and more responsive public service were:

Well-conceived, well-researched, and well-planned;
Located within a development rather than merely a budget-driven paradigm;
Developed in close cooperation with staff, unions and civil society;
Communicated effectively at all levels;
Designed and monitored effectively to ensure that the process of increasing cost-effectiveness does not impact negatively on staff morale, productivity, representivity and the meeting of basic needs through improved service delivery.

The principal goals of the strategy were:

To achieve the optimal allocation of human and other resources throughout the service as a whole.
To realise greater congruence between the needs of the country in terms of the RDP and the size of the public service.
To facilitate greater representivity and service equity through the identification of both redundant and new jobs.
To achieve a balance between the needs and priorities of the RDP and the realisation of a fiscal strategy that seeks to contain government expenditure.
To work towards greater cost-effectiveness through the appropriate allocation and re-allocation of human and other resources towards key priority areas identified in the RDP.

In working towards these goals, the White Paper proposed that a comprehensive review of personnel requirements and staffing structures in all departments and administrations be carried out with a view to realigning them more closely towards the delivery of services to clients and to meeting the outputs required by the RDP. This would be complemented by the introduction of new budgeting systems and the reprioritisation of departmental expenditure. Based on this review, new staffing levels, structures and job descriptions would be introduced, the likely result of which would be "downsizing" in some departments or sections, and "upsizing" in others, within the overall parameters of a leaner service over time. Staff displaced in the process would, where possible, be offered redeployment and retraining opportunities, as well as retrenchment and early retirement packages where appropriate (with due care taken to ensure that such severance schemes do not lead to the excessive loss of key personnel).

The White Paper also proposed that the rightsizing exercise would be complemented by a number of additional and related strategic interventions to assist in the promotion of a leaner and more cost-effective service. These included including efficiency savings, improved productivity, cost-saving adjustments to the remuneration structures, and the contracting-out of services to the private and community sectors, particularly on a partnership basis.

3.2.2.2 GEAR and the Size and Scope of the Public Service

GEAR was unveiled in June 1996, as a response to persistent structural problems in the economy. Through a combination of measures, including fiscal austerity, tighter monetary policy, financial and trade liberalisation, restructuring of state assets and labour market reforms, the Government believed that GEAR would be capable of achieving growth with both job creation and redistribution.

Vital to the success of GEAR would be the introduction of a tighter fiscal policy, aimed at progressively lowering the fiscal deficit target from 4.5% of GDP in 1996/97 to 3.0% of GDP in 1999/2000, and thereby releasing resources for productive investment. Accompanying this would be a reduction in consumption expenditure as a % of GDP from 19.5% in 1997 to 18.1% in 2000. Measures for accomplishing these targets would include:

A thorough audit of government expenditure to identify those areas in which cuts can be made without detracting from government commitments and priorities.
Careful management of the overall government wage bill and the rightsizing programme, in ways in which affordability considerations, maintenance of public services, and macro-economic consistency are paramount.
The strict containment of government spending on other goods and services, and current transfers.
The elimination or scaling down of government activities which cannot be provided to all or which could be undertaken effectively by the private sector.
A variety of budgetary reforms, including the move to multi-year budgeting, designed to promote more effective forms of financial planning and monitoring and to enhance the redistributive thrust of government expenditure.

3.2.3 Rightsizing Measures

Over the past two years a number of policy measures have had a bearing on the size of the public service, both in terms of personnel and cost.

Chapter 4: Human Resources Management and Development

Introduction
An onverview of the transformation process
Human resources planning
Human resources provisioning (HRP)
Human resources development

4.1 Introduction

4.1.1 The Global Context

In recent years, as noted in Chapter 3, many countries in both the developed and developing worlds have embarked on a thorough re-evaluation of the role, structure and functions of the state and public sector organisations in general, and human resources management and development in particular. This has been in response to a number of factors, including:

The growing impact of global markets and competition;
The increasing trend towards economic liberalisation and political democratisation;
The increasing international spread of communications and information technology;
The trend towards "knowledge workers," multi-skilling and multi-tasking;
The growing pressure for equal opportunities in employment.

In the process a number of common themes in relation to human resources management and development have begun to emerge. These include:

An increasing emphasis on quality, performance, efficiency and cost-effectiveness;
The devolution and decentralisation of managerial responsibility and accountability (including the introduction of performance-related contracts to give senior managers the necessary "incentives" to perform in line with central policy directives);
The introduction of new and more participative organisational structures;
The development of new and less rule-bound organisational cultures;
The upgrading of existing management information systems;
An increasing emphasis on equal opportunities and employment equity;
The introduction of more flexible staffing and recruitment practices;
The introduction of effective forms of career pathing;
An increasing emphasis on performance management and human resources development and training, designed to promote participative management and innovation, to build capacity, and to reward individual and team performance.

Underlying these trends has been the growing awareness that "investing in people" is the most productive investment a country or organisation can make.

4.1.2 The Domestic Context

The urgent need to develop South Africa's human resources has been stressed in a variety of policy documents, including the RDP White Paper (1994), the White Paper on the Transformation of the Public Service (WPTPS, 1995), and the Department of Labour's Green Paper on a Skills Development Strategy for Economic and Employment Growth in South Africa (1997). Underpinning this urgency is the fact that South Africa currently ranks last out of 46 countries (at a similar stage of development) in terms of its human resources development performance (World Competitiveness Yearbook, 1996), a fact that is attributable in the main to the legacy of apartheid.

With respect to the public service, the WPTPS stresses that the effective mobilisation, development and utilisation of human resources is not only an important transformation goal in its own right, in building individual and institutional capacity for good governance. It will also be critical for success in a number of the other key priority areas identified in the White Paper (especially institution building and management; representivity and affirmative action; improvement in service delivery; improved productivity and cost-effectiveness; and labour relations), as well as for the success of the transformation process more generally.

Accordingly, a coherent and holistic strategic framework for human resource development will need to be developed at both national and provincial levels. This will entail a number of related elements, including:

The elevation of the role and status of human resource development within the overall framework of government policy;
The development of effective and lifelong career development paths for all categories of public servants;
The improvement in employment conditions;
The introduction of effective performance management and appraisal systems, and the use of incentives to reward individual and team performance;
The basing of promotion and career advancement on performance rather than on seniority or qualifications.
The introduction of effective systems of staff development and training for all public servants, within the context of a national training strategy;
The introduction of affirmative action strategies to improve the representativeness of the service, so that it can draw upon the skills and talents of all South Africans, and derive the benefits of the broader perspectives that a more representative service will bring.

The pivotal role assigned by the WPTPS to human resources management and development is designed to counteract the tendency for transformation strategies to focus on the more visible aspects of change (such as structures, organisations and systems), whilst neglecting the equally important though less visible aspects (relating for example to employee morale, motivation, fears, aspirations and values). Historically human resource issues in the South African public service have been regarded largely as administrative or technical matters rather than the strategic management concerns that can, if properly managed, make a major contribution to the achievement of the goals of reconstruction and development.

The White Paper on Transforming Service Delivery (1997);
The White Paper on Public Service Training and Education (1997);
The White Paper on a New Employment Policy for the Public Service (1997);
The White paper on Human Resource Management in the Public Service;
The Green Paper on a Conceptual Framework for Affirmative Action and the Management of Diversity in the Public Service (1997); and
The Green Paper on A New Law for a New Public Service: Policy Proposals for a New Public Service Statute (1996).

In addition to developing these far-reaching policy documents, the Government has also taken steps to clarify the role of key implementing structures in the human resources field, and notably the DPSA, the Public Service Commission (PSC), and national departments and provincial administrations. Under the 1997 Public Service Laws Amendment Act, as noted in Chapter 3, departments and provinces will assume much greater responsibility for human resources matters than previously. The details of the devolution of managerial responsibility and accountability for human resources matters are spelled out more comprehensively in the DPSA's White Paper on Human Resources Management in the Public Service. This sets out a framework under which departments and provinces will to a large extent determine their own human resources policies and practices, and under which line-function managers will be expected to take on much more responsibility than hitherto for the human resources function. Human resources management will therefore no longer be the sole responsibility of personnel practitioners, but rather will become a core competency for all public service managers.

4.1.3 Purpose

The purpose of this chapter of the Commission's report is essentially three-fold:

To locate the evaluation of current HRM and HRD policies and practices within a broader assessment of the public service transformation process more generally;
To assess how effective government departments have been in translating into practice the guidelines and recommendation relating to HRM and HRD contained in the WPTPS and other subsequent policy documents;
To recommend changes and improvements in current HRM and HRD policies and practices.

4.1.4 Process and Approach

The material in this chapter of the report was derived from a study of relevant policy documents and the reports of the Commission's hearings, as well as an in-depth empirical survey of:

Four national departments, two with national competencies (Justice and Home Affairs) and two with national and provincial competencies (Welfare and Housing);
Three provincial departments in the Western Cape (Social Services, Housing, and Local Government and Planning);
Two provincial departments in Gauteng (Housing and Land Affairs, and Welfare and Population Development).

4.1.5 Structure of the Chapter

The subsequent sections of this chapter provide an overview, assessment and recommendations in relation to the following key areas:

The transformation process more generally, particularly as it relates to HRM/HRD;
Human Resources Planning;
Human Resources Provisioning (HRP);
Performance Management;
Human Resources Development.

In assessing all the above areas, an overarching focus will be the extent to which the requirements of representivity, affirmative action and institutional culture change have been met.

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4.2 An onverview of the transformation process

4.2.1 Differing Interpretations of Transformation

As noted in Chapter 2 most departments and provincial administrations have produced their own transformation documents. These range from the Department of Justice's Justice Vision 2000 to the Department of Welfare's White Paper on Social Welfare and Gauteng Province's Growth and Development Framework. A study of these and other similar transformation documents reveal two important, related and somewhat worrying things. In the first place, it is clear that there is no shared common vision and understanding of transformation, based on the general vision laid down for the public service as a whole in the WPTPS. In the second place, many departments seem to have a very partial view of transformation, rather than the holistic approach recommended in the WPTPS.

For some of the senior managers interviewed, change is believed to be adequately reflected in a more representative workforce, with organisational culture issues being ignored or seen as unimportant. For others, it refers solely to changes in service delivery, with little emphasis being placed on internal change. This illustrates the tendency to ignore the extent and complexity of the transformation process as a whole and how its most important indicators are often in the intangible rather than the tangible changes that occur in the working environment. Some of the personnel interviewed, however, did seem to have a far more complex understanding of transformation, seeing it not as an event, but as process that will continue to unfold over time.

Within the national Department of Housing, it was stated that the current structures and processes of the department are appropriate and that people needed to enter through lower positions and work their way through the organisation. Through a traditional process of career development based on seniority, the department would be consolidated and a common vision would be built. Similarly, in the Department of Justice the view was expressed that the kinds of fast track development programmes for new affirmative action recruits recommended in the WPTPS can be damaging to the levels of standards traditionally maintained by the department, and are therefore not appropriate. As indicated in Chapter 2, the PRC noted that in those departments where such negative views were adopted, representivity almost invariably was lower.

4.2.2 Management of the Transformation Process

In general, most of the national departments visited have established directorates or units to manage transformation, in line with the recommendation in the WPTPS. The location of the units varied, however. Within Justice, a Chief Directorate: Transformation has been established under the Deputy DG for Human Resources while in Home Affairs the Directorate is called Special Programmes and answers directly to the Director General. In the Housing Department transformation functions such as equity and gender are located only at a Deputy Director level and are not seen as priority areas of activity. In the Department of Welfare and Population Development the special programmes officer for Affirmative Action is responsible for transformation and is also located at Deputy Director level, reporting to the Director: Management Services.

Within the provincial governments, the situation is slightly different, with departments responding to transformation programmes both as they are defined by their national departments and by Corporate Services. In Gauteng, the corporate core is seen as playing a significant role in terms of policy development, within particular emphasis on the HR functions of employment equity, human resource development and gender. The Director General's office has also spearheaded the Service Excellence campaign, designed to encourage departments to substantially improve on service delivery. In the Western Cape, a Central Transformation Committee in which all departments are represented has been established and is working on developing a strategic approach to transformation in the province. Departmental transformation units have also been set up. The Department of Social Services has both Office Transformation Committees and District Transformation Committees that work together with the central unit.

Despite the progress made in setting up such transformation units, a number of concerns were raised during the survey. In the first place, there was a certain amount of confusion in some departments/administrations about the respective roles of the transformation units and senior management in the transformation process. In some cases this had led to vacuum which was slowing down the process.

The answer would seem to be that successful transformation needs the integrated involvement of both the units (to ensure the appropriate ownership of the process by management, staff and unions) and senior management (who should act as change champions to ensure that the process is effectively driven through the organisation as a whole).

In the second and related place, concern was expressed in a number of the departments surveyed (and in particular the Departments of Welfare and Justice) that the deliberations and recommendations of the transformation units were not being effectively fed into either the strategic and budgetary planning processes of the organisation or the core management processes and line activities. This left some of the units feeling marginalised. Senior management clearly need to take corrective action in this regard.

In the third place, there was little consensus within the departments on the question on the question of whether additional dedicated capacity is required to support key areas of the transformation process. Some felt that the hiring of temporary experts (for example specialist gender or equity officers) was an unnecessary expense; whilst others felt that such temporary appointments were vital to the successful implementation of the transformation process. An indication of the success of the work of such specialists may be that in the long term such posts are no longer appropriate but at the present time they are.

4.2.3 Building Capacity for Transformation

The levels of skills exhibited in the people dealing with transformation differed widely. In part this relates to whether members of staff have been appointed specifically to deal with equity, gender, and other transformation issues or whether these functions have been given to existing staff members in addition to their "normal" duties. Where staff have been specially appointed, they are usually skilled in policy development and programme management and are able to run with the process. Senior managers responsible for transformation in the Departments of Home Affairs and Justice would fall into this category. Where, however, such staff have only been trained in personnel administration, they are often ill-equipped to take on the challenges of the new tasks given them, and tend therefore to give such tasks less priority than the routine ones with which they are more familiar. The provincial departments visited tended to illustrate this trend, although plans are being made in some of them to train such staff in broader HR and transformation functions. An interesting issue relating to capacity, that was raised by some of the people interviewed, was that they do not always find the policy guidelines of the DPSA to be accessible or easily understandable. Often they are not sure about how to go about implementing the recommendations contained in the DPSA's policy documents.

This suggests the need for a joint approach, involving capacity building in individual departments and the development of clearer implementation guidelines by the DPSA.

4.2.4 Transforming the Human Resources Management Function

With regards to policies relating to gender, equity and disability, the departments showed very different approaches and successes. The regulatory framework informing these areas has been clearly defined and in general the departments reflected a commitment to developing and implementing policy to address the issues. In some cases policy had been developed through long consultative processes and has been endorsed by the senior managers. The Department of Justice's Employment Equity and Representivity document and the Department of Home Affairs' Affirmative Action document have been registered with the DPSA and are good examples of well thought out policy frameworks.

In other cases the importance of the policy process has been subverted by its location at a very junior level. The officers left to deal with the process have been given the unequivocal message that it is not seen as being a priority. The national Department of Housing provides a clear example of affirmative action policy being developed at a junior level and then not being seen for several months after it was submitted to senior management for approval.

The content reflected in the affirmative action and equity policy documents differs quite widely, with some departments remaining strongly internally focused while others have chosen to embrace a far wider contextual understanding of the issues. The extent to which policy has been effectively implemented also differs widely from department to department, reflecting to a large extent variations in the degree of support received by senior management, as well as differences in the general implementation capacity of different departments.

Labour relations, while not a function that is generally located with other transformation programmes, has become prioritised due to the introduction of labour legislation that affords greater rights to employees. The trend seems to be that labour relations officers are being used as mechanisms to address non-performance, rather than as enablers who can empower employees and create better relationships between them and their managers. In the Department of Justice, for example, the performance management process has been given to the Labour Relations directorate to handle, rather than to the Directorate dealing with Human Resource Development. In the national Department of Welfare, Labour Relations is a sub-directorate under Management Services and has no clearly defined role in respect of the transformation process at all. In contrast, however, the labour relations officer in the Department of Home Affairs explained that he saw a significant part of his role being that of a trainer, assisting staff of the department to understand the Labour Relations Act and their rights within it.

4.2.5 Representivity and Affirmative Action

4.2.5.1 The Constitution and the WPTPS

The 1996 Constitution lays the basis for affirmative action (AA) strategies to increase the representivity of the public sector institutions. Section 195 [1] stipulates that:

"Public administration must be broadly representative of the South African people, with employment and personnel management practices based on ability, objectivity, fairness and the need to redress the imbalances of the past to achieve broad representation."

The WPTPS provides a convincing rationale for AA strategies, based on the need to reverse the systematic exclusion of Black people and women from positions of influence within the public service that had characterised the apartheid system; as well as the systematic exclusion of people with disabilities from positions at all levels within the service.

"With the new dispensation in South Africa, this situation cannot be allowed to continue. To meet the new and challenging tasks with which it is faced, and in particular to improve the quality and equity of service delivery, it is absolutely imperative that the public service draws upon the skills and talents of all South Africans, and derives the benefits of the broader perspectives that a more representative service will bring." (WPTPS para. 10.1)

The skewed composition of the management echelon of the former RSA public service, with an overwhelming predominance of White males, is demonstrated in Table 4.1. This shows the profile of the management echelon (Director to DG) of the former RSA Public Service by population group and gender in 1994. Representivity of Black people at such levels was higher at this time, of course, in the "Bantustan" administrations, although women and people with disabilities were still seriously under-represented. Although the situation has improved since 1994 (as Table 4.2 shows), the current level of representivity still leaves much to be desired.

Table 4.1: Profile of the Management Echelon (Director to DG) of the former RSA Public Service by Population Group and Gender 1994 - In Percentages

	African	Coloured	Asian	White	Male	Female
% of Management Echelon	2.0	1.0	3.0	94.0	95.0	5.0
National Population (CSS mid 1995 Estimate)	76.0	8.0	3.0	13.0	49.0	51.0

Source: Office of the Public Service Commission

The WPTPS recognised that in South Africa, as in many other countries, the introduction of AA programmes will undoubtedly be confronted by a number of potential problems and dangers. These include the dangers of "tokenism," reverse discrimination, and the possible alienation of non-target groups within the public service, as well as the danger of prioritising affirmative action at the expense of other transformation goals, especially efficiency and effectiveness. For this reason the White Paper stressed that AA policies and programmes should:

be devised and planned in a feasible, sensitive yet unapologetic way, as part of a broader approach to human resources development and capacity building;
address the specific and different needs of Black people, women and people with disabilities;
be seen not just as a hiring policy or numbers game but as an holistic approach that empowers people hitherto marginalised and enables them to succeed;
be devised and introduced in ways which complement rather than conflict with other transformation goals and programmes;
be explained and communicated effectively at all levels.

Although the WPTPS steered clear of fixed quotas for departments and provinces, it did lay down a number of broad targets with respect to increasing representivity. These were:

That within four years all departmental establishments must be at least 50 percent Black at the management level;
That within four years at least 30 per cent of new recruits to the middle and senior management echelons should be women.
That within ten years, people with disabilities should comprise 2 per cent of public service personnel.

The WPTPS also set out a number of guidelines to inform departmental AA plans and programmes. These included:

The carrying out of an audit of the composition of departmental personnel according to race, gender and disability, at different levels and across occupational classes;
The establishment of clear goals, objectives and measurable targets and outcomes for the affirmative action process; strategies and time-frames for their achievement; and methods for the annual monitoring and evaluation of progress, including the production and use of accurate management information statistics;
The identification of the people and units designated as responsible within departments and provinces for ensuring the effective implementation of affirmative action programmes;
The introduction of training programmes to promote affirmative action; new recruitment and promotion procedures based on non-discriminatory criteria of competency and performance rather than on formal qualifications and traditionally valued forms of experience; and awareness raising and training strategies designed to promote a positive view of affirmative action and to discourage tokenism and the stereotyping of beneficiaries.

The guidelines established in the WPTPS have been given more substance, inter alia, by the DPSA's 1997 Green Paper on a Conceptual Framework for Affirmative Action and the Management of Diversity in the Public Service, as well as by the Department of Labour's 1996 Green Paper on Employment and Occupational Equity and the recent Employment Equity Bill.

4.2.5.2 Progress with Respect to Race and Gender

With respect to the racial and gender composition of the management echelon (Director to DG), the Commission's investigations revealed:

That a number of departments (particularly Education, Health and Welfare) and provinces had made quite encouraging progress towards the targets laid down in the WPTPS, as well as towards the introduction of the kind of holistic and integrated strategies for AA recommended in the White Paper;
That a number of departments and provinces had made much less progress in this regard (particularly the Departments of Home Affairs and Justice, and the South African Revenue Services, and especially the Department of Housing which remains, disturbingly, an exclusively male and predominantly white preserve at the management levels);
That progress in the area of race has generally been more noticeable than in the area of gender (with the Departments Home Affairs, Housing, Justice and Safety and Security, and the Free State, KwaZulu-Natal and the Northern Province, performing well below average in the area of gender representivity).

Such variations in progress were supported by the evidence of the HR Task Team, as well as by the Statistical Analysis of Public Service Personnel commissioned by the PRC (and attached to this report as Annexure 2). Table 4.2 (below) provides the most recent profile of the management echelon in selected departments and all provinces by race and gender. As the Statistical Analysis in Annexure 2 demonstrates, progress towards representivity in the professional and technical ranks of the public service has been even slower than in the case of the management echelon.

Departments and provinces provided a range of familiar explanations for slow progress with respect to AA and representivity. These included the lack of appropriately skilled and qualified Black and female applicants for posts, financial constraints (in terms of establishing new positions), and fears about "lowering standards." A number also mentioned that they were constrained by Chapter B VII of the Public Service Staff Code (PSSC) which provided a very mechanistic and conservative approach to representivity, at variance with the holistic and developmental approach recommended in the WPTPS, and in particular the WPTPS's focus on the importance of social redress (with the passing of the Public Service Laws Amendment Act of 1997, Chapter B VII will no longer apply, and hopefully therefore will no longer provide departments with either an explanation or excuse for delaying AA plans and programmes).

Table 4.2: Profile of Management Echelon in the Public Service by Population Group and Gender 31.10.97 (Selected Departments and All Provinces) - In Percentages

Department/Province	African		Coloured		Asian		White		Race		Gender
Department/Province	M	F	M	F	M	F	M	F	B	W	M	F
Departments
Education	28.0	8.0	8.0	4.0	8.0	4.0	36.0	4.0	60.0	40.0	80.0	20.0
Foreign Affairs	21.3	6.6	1.6	0.0	6.6	1.6	57.4	4.9	37.7	62.3	86.9	13.1
Health	23.1	23.1	0.0	7.7	0.0	0.0	38.5	7.7	53.8	46.2	61.5	38.5
Home Affairs	46.7	0.0	0.0	0.0	0.0	0.0	53.3	0.0	46.7	53.3	100	0.0
Housing	21.4	0.0	0.0	0.0	0.0	0.0	78.6	0.0	21.4	78.6	100	0.0
Justice	19.6	1.5	0.8	0.0	1.2	1.9	71.5	3.5	25.0	75.0	93.1	6.9
Labour	17.4	0.0	4.3	0.0	4.3	4.3	56.5	13.0	30.5	69.5	82.7	17.3
DPSA	38.5	15.4	0.0	0.0	0.0	7.7	15.4	23.1	61.5	38.5	61.5	38.5
Public Works	16.7	25.0	8.3	0.0	8.3	0.0	41.7	0.0	58.3	41.7	75.0	25.0
Safety & Security	16.4	0.0	2.5	0.3	2.3	0.3	75.6	2.8	21.2	78.8	96.6	3.4
Revenue Services	1.4	0.0	1.4	0.0	1.4	0.0	88.9	6.9	4.2	95.8	93.1	6.9
Welfare	11.2	22.2	0.0	22.2	0.0	0.0	22.2	22.2	55.6	44.4	33.4	66.6
Provinces
Eastern Cape	74.1	12.1	0.0	0.0	0.0	0.0	12.1	1.7	86.2	13.8	86.2	13.8
Free State	18.0	4.0	0.0	0.0	0.0	0.0	76.0	2.0	22.0	78.0	94.0	6.0
Gauteng	17.4	5.8	2.2	1.4	3.6	1.4	63.0	5.1	31.9	68.1	86.3	13.7
KwaZulu-Natal	37.3	1.3	1.3	0.0	4.0	1.3	52.0	2.7	45.3	54.7	94.7	5.3
Mpumalanga	58.6	20.7	6.9	0.0	6.9	0.0	6.9	0.0	93.1	6.9	79.3	20.7
Northern Cape	20.0	10.0	25.0	0.0	5.0	0.0	40.0	0.0	60.0	40.0	90.0	10.0
Northern Province	84.9	7.5	0.0	0.0	1.9	0.0	5.7	0.0	94.3	5.7	92.5	7.5
North West	53.3	16.7	0.0	0.0	1.9	0.0	26.7	0.0	73.3	26.7	83.3	16.7
Western Cape	0.0	0.0	23.4	2.1	8.5	0.0	57.4	8.5	34.1	65.8	89.4	10.6
All departments & provinces	23.4	3.8	2.8	0.7	2.8	0.7	61.8	4.0	34.2	65.8	90.8	9.2

M = Male F = Female B = Black W = White

Source: Statistical Analysis of Personnel in the Public Service in South Africa, PRC 1998 (see Annexure 2 for more details)

Whilst the Commission appreciates some of the difficulties, noted above, we nevertheless feel that they do not provide a justifiable excuse for the disturbingly slow rates of progress towards representivity in a number of departments (especially as other departments seem to have managed to overcome such constraints much more effectively). They certainly do not, in the Commission's opinion, justify the deliberate avoidance of the AA guidelines laid down in the WPTPS by departments such as Justice and Foreign Affairs, as noted, for example, in Chapter 2 (Section 2.5.1) above. Action is therefore urgently needed to encourage such departments to accelerate the rate of progress with respect to AA and representivity. Recommendations for such action are included at the end of this section.

4.2.5.3 Progress with Respect to Disability

Due to the lack of reliable disaggregated data, the Commission was unable to assess with any degree of accuracy the progress that has been made with regard to the representivity of people with disabilities. The lack of data is itself a source of major concern for the Commission. Without the collection and evaluation of reliable statistics, it will be difficult if not impossible to formulate, implement and monitor effective strategies to promote increasing representivity. The evidence that does exist, however, suggests that people with disabilities, who constitute about 7% of the South African population, continue to be seriously under-represented at all levels of the public service, and currently comprise less than 0.1% of personnel.

In the past people with disabilities in South Africa have been seriously disadvantaged, discriminated against, disempowered and marginalised in the economy & society in general, in the public service in particular, and in terms of both employment opportunities and service delivery. Service delivery has been inadequate and in many cases non-existent, especially for those disabled people in disadvantaged Black communities. The serious under-representation of people with disabilities within the public service also impacts negatively on service delivery, by depriving the service of their detailed skills, knowledge and experience in the policy formulation and implementation processes.

Since 1994 there have been signs of improvement. The Government has committed itself to a more proactive, integrated and developmental strategy, based on the vision of a society for all and the premise that people with disabilities are a natural and integral part of society and should therefore have the same opportunities as other citizens to contribute their experience, talents and capabilities to national development. Evidence of recent progress includes:

The 1996 Constitution, which in Chapter 2, Section 9 guarantees the rights of people with disabilities to be treated equally and enjoy the same rights as all other citizens;
The emphasis placed on redressing discrimination in employment and service delivery for people with disabilities in the RDP White Paper and the WPTPS;
The establishment of the Office on the Status of Disabled Persons in the Office of the Deputy President;
The production and publication by the Office of the President of the White Paper on an Integrated National Disability Strategy (November, 1997).

If the recommendations contained in the above policy documents are to be effectively implemented, particular with respect to the public service employment, a number of important challenges and constraints, which currently inhibit the recruitment and retention of disabled persons, will have to be overcome. These include:

Discriminatory Legislation, such as the health requirements in the 1994 Public Service Act, which has served to restrict the access of people with disabilities permanent employment within the public service. Whilst the 1994 Act has now been replaced, other legislative constraints persist. These must be clearly identified and addressed.
Lack of Human Resources Development Opportunities. When people with disabilities are employed in the public service, special programmes should be implemented to compensate for their past disadvantage. Instead disabled employees are frequently denied access to programmes of in-service skills development and capacity building, and career pathing, particularly because many departments are unable or unwilling to cover the extra costs involved (for example, hiring signers for deaf people, or providing Braille facilities for the blind).
Lack of Environmental Accessibility. Most public buildings and offices contain barriers that restrict the accessibility of people with disabilities. These include the lack of ramps and accessible toilet facilities; narrow doorways; the lack of interpreter services for deaf people; and the lack of Braille facilities for the blind.
Lack of Assistive Devices. The work environments of disabled employees frequently need adapting. Such adaptations range from the lowering or raising of desks to adapting a telephone or computer. Departmental budgets very rarely contain provision for such adaptations.
Lack of Effective Transport Facilities. Many people with disabilities have difficulty getting to work because the public transport system caters inadequately for their needs. Approximately 99 per cent of disabled people do not own their own transport.
Lack of Awareness and Commitment. Many of the above problems are compounded by a lack of awareness within and outside the public service of the situation and special needs of people with disabilities, and a similar lack of commitment by public service managers to redressing the situation.
Finance. The Government has committed itself to ensuring adequate funding for the Integrated National Disability Strategy. However, it has also committed itself to reducing the costs (particularly the wage bill) of the public service. Providing an appropriate work environment for people with disabilities (including training and development) does not come cheap. Care must therefore be taken to ensure that cost cutting exercises are not undertaken at the expense of introducing effective programmes for disabled employees.

In Chapter 2 of this report the Commission recommends that the Office on the Status of Disabled Persons (OSDP) be located within the proposed Office of Public Management within the President's Office (together with the Office on the Status of Women). An important task of the OSDP would be to design a specific strategy for addressing the above constraints. A number of suggested recommendations in this regard are included at the end of this section.

4.2.6 Representivity, Transformation and HRD

While the statistics in Section 4.2.5 above are of critical importance, they tell only half the story. If new recruits are placed in an organisational environment in which they cannot succeed, due for example to entrenched and pervasive prejudice, then equity and representivity become meaningless. The organisational culture issues to which this then points are critical. At present, despite all of the change processes being undertaken in the departments analysed, very few efforts have so far been made to undertake holistic organisational culture interventions, beyond the occasional management of diversity programmes seen, for example, in the Departments of Home Affairs, Justice and Welfare. While change in culture may be a natural consequence of overall organisational change, there surely is value in prioritising its integration into other change processes.

With regard to this last point, one worrying development noted by the Commission is that a number of new senior managers who have been recruited to the public service do not appear to be contributing sufficiently to changing the institutional mindset of the service. To a disturbing extent, it appears as if they are adopting the core values, systems and policies of the "old' public service, albeit with a few though not sufficient exceptions.

This points to the need for a strong relationship between transformation and training and development, in line with the guidelines and recommendations in the WPTPS and the White Paper on Public Service Training and Education (WPPSTE, 1997). Fast track programmes for new managers should be readily available, in addition to comprehensive induction processes. Mentoring schemes and ongoing capacity building programmes should also be put in place. With the possible exception of the Department of Justice (where HRD plans are being integrated into the overall transformation process), the evidence suggests that these processes are not happening in most departments, and that there is in fact little or no link between the transformation process and training. New managers are often not given the introductory training that they require and are therefore immediately disadvantaged. Sensitivity training, such managing diversity programmes, are being used more often, but often with varying results, precisely because they are not developed in line with the specific needs of the transformation process and practice. In the Department of Home Affairs, the Deputy Director of Personnel Development has not been consulted on the transformation process at all, and still refers to the section in the Staff Code dealing with Personnel Development as being the "policy" upon which she bases her training programmes. Yet the department's draft Transformation Policy refers in specific detail to the principles that should be governing the education, training and development processes in the department.

4.2.7 Monitoring the Transformation Process

Beyond the monitoring of statistics relating to representivity (which are themselves flawed, particularly in relation to the effective monitoring of disability), few systematic mechanisms have been put into place in most departments to monitor and evaluate the transformation process more generally. This refers to indicators relating to changes in service delivery as well as to changes in internal organisation and culture. Strong monitoring and evaluation mechanisms clearly need to be put in place as a matter of urgency to ensure that when successes with regards to transformation are claimed, that they have some empirical foundation in actual changes in practice, behaviour and performance.

4.2.8 Observations and Recommendations

Where transformation policy is not yet in place in departments, support needs to be provided to managers to enable them to both develop policy and translate it into practice.
The nature of this transformation policy should relate directly to both external and internal change processes. Internal organisational transformation must be seen as a critical mechanism to enabling improvements in service delivery.
The role of transformation units or separate structures dealing with transformation issues needs to be assessed within the context of individual departments to ensure that they are the most effective vehicles to enable change to take place.
Where transformation units or individuals managing the change process are being marginalised through their position within the departmental establishment, or through their reporting structures, this situation needs to be reconsidered as a matter of urgency.
The role of senior management in the transformation process needs to be reviewed to ensure that senior managers act as change champions and are fully committed to driving the implementation process throughout the organisation.
Skills and capacity to manage the change process must be built into departments, by identifying gaps in capacity and introducing specific programmes to address them.
Transformation of human resource practices is critically important, and needs to be given appropriate priority and to be systematically integrated into broader departmental policy and strategic plans, as well as into the budget cycle.
A holistic HRD strategy need to be developed, with clear development planning, career paths, training opportunities, staff retention policies and accelerated development mechanisms targeted at the most disadvantaged within the public service, as well as at those who are being recruited to redress the racial imbalances at the more senior levels.
A systematic review needs to be carried out (under a broad human resources development framework) of current recruitment, promotion, training and development practices in the public service, with a view to determining how these may discriminate against Black people, women and people with disabilities. This should form the basis for the formulation of more effective AA strategies.
Human resources development and capacity building should be appropriately resourced, backed by new legal provisions, and effectively monitored and evaluated.
Existing legislation needs to be revised and new legislation introduced to promote affirmative action. Effective mechanisms will need to be put into place to ensure that such legislation is adhered to.
Laws against sexual harassment in the workplace should be enacted and implemented.
All public service departments and agencies should be required to draw up effective affirmative action and employment equity policies and strategies for people with disabilities, in consultation with relevant stakeholders.
Strategies specifically targeting the disabled as a disadvantaged group would have to include specific recruitment and selection strategies at different entry levels; staff development and training; career pathing; the necessary modifications and adaptations required to provide an adequate working environment for the disabled; as well as plans for improving service delivery to people with disabilities outside the sphere of public service employment.
AA plans and programmes should be accurately costed and appropriate budgetary provision made, within the context of the new approaches to budgeting and costing proposed in Chapter 5 of this report.
The introduction of performance-related contracts for Heads of Departments (as recommended in the WPTPS and strongly endorsed by the Commission) should include specific AA targets (particularly in relation to gender and disability), thus giving HODs the necessary incentive to take a more proactive approach to affirmative action and representivity.
Awareness training for senior managers, should be introduced to enable them to plan and implement effective strategies for women and the disabled in particular. This should be part of a broader awareness campaign both inside and outside the public service.
Special programmes, such as valuing and managing diversity, should form part of public service affirmative action strategies to prevent the "old" bureaucratic ethos perpetuating itself as new candidates are recruited to the service. A change in ethos is critical to changing the public service into an effective, efficient and representative arm of government.
AA strategies should also address issues of social class. A wider focus is called for to address the needs of the most deprived and subordinate sections of the public service to provide them with more effective skills development, career pathing opportunities, and the means for upward mobility.
Monitoring and evaluation of the transformation process should take place on a regular basis to enable departments to assess the extent to which change is taking place. This should go beyond the monitoring of figures relating to representivity by examining qualitative changes in the environment, practices and processes of the departments.

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4.3 Human resources planning

4.3.1 The Importance of Human Resources Planning

The WPTPS stresses the need for a planned and coordinated approach to human resources management, as an integral part of the broader process of strategic planning and management of public sector institutions. Amongst other things, the human resources planning process will need to include:

An analysis of key external factors impacting upon the department and HR requirements;
An analysis of the key internal factors impacting upon the department and HR requirements;
An analysis of the key strategic priorities of the department, in line with its policy framework, public service commitment, and prevailing budgetary constraints;
An analysis and the human resources required to implement these priorities on a short, medium and long term basis;
An analysis of the current HR profile of the department and the current HR availability in the market;
A projection of the likely HR availability in the future and the manner in which this will address future HR requirements of the department (this is particularly important with regards to the high turnover of staff, shortage of skills and competition between departments, and between the public and private sector to attract the best people);
Development of training and staff development programmes with internal and external service providers to address the gap between required and existing human resources.

4.3.2 Differing Interpretations of Human Resources Planning

The survey revealed that human resource planning is understood and approached differently in most departments. For some departments, it is clear that human resource planning refers to the current public service approach of either matching people to existing posts on the staff establishment or alternatively motivating for a handful of individual posts, as and when the need arises. For other departments, especially those who have undertaken a general strategic planning approach in some detail, there is an understanding that HR planning refers to a more detailed process of understanding both current and future needs and linking these to current and future staff availability. Where the latter understanding does exist, however, little has been done to operationalise it in practice.

In the Department of Home Affairs, for example, there is an 'informal' acknowledgement of the impact changing policies are going to have on the human resources of the department, but little has been done to address it. In the national Department of Housing, there is little strategic or integrated approach to taking on the implications of the new Housing policy for the management and development of the organisation, its components and staff and its implementation partners.

The provincial departments reflect different trends. This is evidenced, for example, in the Gauteng Department of Housing and Land Affairs, whose new organogram is an attempt to achieve the post levels they feel are required and to create the basis for more lateral teamwork to enable a more creative and problem solving approach. There is also a recognition that more integrated processes and programmes are needed and that this will require the development of the HR component beyond its current focus on personnel administration.

4.3.3 Links Between Strategic Planning and HR Planning

The most significant way in which human resource planning can become an effective instrument of management within an organisation is through having a direct and informed link to the strategic planning process.

The current relationships that exist between human resource planning and strategic planning in the departments reflect some interesting trends. The first general comment to make would be that systematic links between HR and strategic planning are inconsistent. The strategic planning process itself is in its infancy in most departments and in others does not exist at all. Where it does exist, human resource requirements are sometimes reflected, usually through the identification of "capacity gaps." This term is used widely without apparent common meaning. In some cases it seems to refer to a lack of posts and the related lack of finance to fund additional ones. In other cases it seems to refer to the lack of skills and competencies, which may in turn translate into the need to employ more skilled staff, to train existing staff, or a combination of both approaches.

The strategic planning processes themselves are of interest. In most cases they are strongly linked to the budgeting cycle. In the past the public service generally planned on an annual budget and did not make many projections beyond those related to the coming year. The introduction of the medium term expenditure framework (MTEF) has resulted in departments being forced to undertake three year planning. Set in the context of stringent budgetary constraints laid down in GEAR, and with its focus on cost drivers, the MTEF seems certain to result in departments beginning to shift their emphasis in planning towards a more efficiency driven and quantifiable outcomes-oriented strategic approach. Departmental budgets in the future will hopefully be driven by strategic priorities, rather than policy being forced to meet predetermined fiscal constraints. While the relationship between strategy and budget is obviously a dynamic one, the focus on providing a framework within which delivery can be facilitated is an important shift in emphasis.

With regards to HR planning, the MTEF provides a useful format within which future HR needs can be predicted and costed. The introduction of a longer three-year perspective should enable HRD, for example, to be seen as a real investment that will ultimately yield sizable benefits for the department. For this to happen, however, departments will need to develop a much more systematic approach to HR planning than is currently the case. In most departments surveyed, the current planning processes, where they exist, fell well short of the kinds of processes outlined in 4.3.1 above.

Current HR planning processes are largely ad hoc and short-term, carried out in the main by junior rather than senior management, based usually on a superficial assessment of current skill profiles and future needs, and rarely linked in any systematic way to the broader strategic planning processes for service delivery and other transformation goals.

Because of the lack of systematic HR planning issues like right-sizing have not been dealt with appropriately. As the recent Provincial Review Report (DPSA, 1997) demonstrates, national and provincial departments have suffered as a result of the impact of Voluntary Severance Packages on their skills base. This loss is attributable in large part to the lack of understanding around projected future capacity requirements.

4.3.4 Building Capacity for HR Planning

The survey indicates that in most departments the skills required for effective human resources planning do not currently exist. This is true in particular of the skills to develop comprehensive human resource profiles for the departments. Training programmes need to be developed to enable senior managers to understand the HR planning process and to be able to engage in it at a sophisticated level. Improved information systems are also critical for the process of planning. PERSAL is simply a data capturing mechanism and not a management tool. For managers to be able to engage in strategic HR planning, better quality information will have to be available for them to access readily.

4.3.5 Observations and Recommendations

Clear guidelines as to what human resource planning entails and the kinds of issues that the departments should be looking need to be developed by the Department of Public Service and Administration.
Human resource planning has to be focused on immediately with managers trained to understand its importance and to integrate it into overall strategic planning processes of the departments.
Human resource planning needs to be linked to both national and provincial priorities, within a strategic framework that prioritises on service delivery. It should therefore be integrated into all planning cycles within the department and dealt with at an appropriate senior level in the department.
Clear methodologies and approaches to HR planning need to be developed, which link in with the strategic approaches referred to above. Analyses of factors impacting on human resource planning have to be systematic and in line with policy developments.
Programmes for skills development should be undertaken in line with human resource planning requirements, as should career pathing and succession planning.
Processes of right-sizing have to be adequately planned for with departments developing a clear sense of their skills and capacity requirements in the future and restructuring around these, in line with fiscal imperatives.

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4.4 Human resources provisioning (HRP)

4.4.1 The Nature and Scope of HRP

Human resources provisioning refers to those activities that take place within an organisation to ensure that it has the right number of people with the right skills, knowledge, qualifications, experience and attitudes to carry out effectively the various tasks that are necessary to meet organisation's overall aims and objectives.

HRP involves a number of related processes which include:

Job planning analysis and evaluation (the identification of staffing needs)
Recruitment (through advertising and promotion)
Selection through shortlisting , interviews, and other forms of assessment
Placement and Induction
Probation
Promotion and career pathing

Human Resource Provisioning (HRP) was often referred to in the past as manpower planning or manning. Because of recent and understandable concerns about the use of gender sensitive language, the use of this term is increasingly being phased out in many departments and replaced by HRP.

4.4.2 The Importance of HRP

HRP is vital to the public service (and indeed for other organisations) for five main reasons:

The staff of the public service are its greatest asset. Without them other resources such as capital and equipment will remain idle and unproductive.
Staff costs form the largest expenditure item in most organisations. In the South African Public Service, the wage bill currently accounts for close to 60% of total consumption expenditure (although significant reductions in staff numbers are being planned and executed). Under such circumstances it is again important that the right staff are appointed.
Sound policy and practice at the HRP stage provides an effective and indispensable platform for other important aspects of an organisation's human resources strategy, such as career pathing, staff development and training, organisational development, appraisal and incentive systems, and managing diverse staff groups.
HRP is clearly central to the Government's aim of increasing the representivity of the public service, particularly through Affirmative Action recruitment strategies.
The WPTPS stresses the need for more flexible and decentralised forms of recruitment and selection, as an integral part of the process of building more effective and responsive institutions and management systems. HRP will have an important part to play in this process.

4.4.3 Trends with Respect to Policy

All HR related departments and directorates are conversant with the objectives of the WPTPS particularly in relation to such issues as Affirmative Action, representivity, institution building and management. Few departments however have developed HRP policies, plans and procedures tailored to the specific needs of each individual department whilst at the same time complying with the norms and standards laid down by the Ministry, the Public Service Commission and the Provincial Service Commissions in co-determination with the public sector unions.

The production of such departmental policies, plans and procedures for HRP will need to reflect, among other things;

The priorities laid down by cabinet, and communicated to ministries and premiers;
The need for a new service ethos and orientation, where service delivery is prized more than blind conformance to rules and regulations;
The need for representivity and affirmative action;
The need for a leaner more productive and cost effective public service;
The need for HRP procedures and practices that are open and transparent and that are operated in a fair and impartial manner.
The need for training and capacity building in the field of HRP for a wider range of managers and staff.

With respect to the national departments surveyed, Home Affairs and Housing had not yet developed new policies with respect to HRP. The departments of Housing at national and provincial levels have been deliberately cautious and state quite categorically that new policies on HRP cannot be developed until the work of the department is properly defined.

At the Provincial level, the Western Cape Provincial Administration has used the concept of building a professional ethic and ethos as a guiding principle for its human resource management, development, planning and provisioning. Its aim is to develop a proud corporate image which provides excellent service delivery to people in the Province. It is nevertheless still using the inflexible prescripts laid down in the Staff Code as the basis for its HRP policies.

4.4.4 Trends with Respect to Strategy

Responsibility for HRP is vested by the Public Service Act (1994) in the Heads of National Departments and Provincial Administrations, subject to the advice and in certain cases approval of the PSC and Provincial Service Commissions (a role than has now been transferred from the PSC to the DPSA). In practice, however, much of the day to day responsibility for HRP activities has been assumed in most departments by personnel sections or human resources sections rather than line managers. Line managers seem not to be too concerned about this because it affords them the opportunity to concentrate on the actual running rather than provisioning of their divisions or directorates.

HRP is still not seen as a strategic management issue. It is still regarded in all the departments surveyed at both national and provincial levels as a special preserve of personnel directorates or sections. None of the departments had developed a comprehensive strategic plan for HR as a whole. While staff in senior HR positions have good technical skills, and demonstrate a clear understanding of the procedures and regulations relating to personnel administration, they have rarely had the opportunity to discuss with senior management the strategic role of HR, its position in the department and the kind of role it should be playing in the future.

Similarly, with the exception of Education and Health (which have their own personnel components), HR in the provinces is still located in Corporate Services (now known as General Administration in the Western Cape). The Departments of Social Services and Housing in the Western Cape Provincial Administration still play a peripheral role in developing their own HR strategies. The Department of Housing in Gauteng expressed the view that departments are not strong enough at the moment nor do they have the capacity to manage their own HR processes.

Most departments did, however, recognise the need for recruitment and selection to be based on principles of representivity and affirmative action as outlined in the WPTPS. Home Affairs, for example, places strong emphasis on representivity. Social Services in the Western Cape, however, argued that it was hard to implement AA strategies whilst still adhering to the Personnel Administration Standard (PAS) requirements which essentially strangle the flexibility required for an effective HRP strategy to promote AA and representivity.

With the planned abolition of PAS and other HRP prescripts in the Staff Code in 1998, as part of the move towards greater decentralisation in HR matters envisaged in the new Public Service Laws Amendment Act, it will be vital that departments and provincial administrations move towards a more strategic and innovative approach to HRP planning. This will also entail that line departments and managers play a greater part in HRP than they have done previously.

4.4.5 Trends with Respect to Structure

Whilst the responsibility for HRP is situated in the main in corporate services or specialised personnel components, some departments have nevertheless taken a number of imaginative steps to align HRP with broader transformation imperatives, which in turn have been shaped by new policies and laws such as the Green Paper on Employment Equity and the Draft White Paper on a New Employment Policy for the Public Service. They have also created new structures to drive the transformation processes. In the Department of Home Affairs, for example, personnel management is being overseen by the Directorate, Special Programmes and Transformation, which was created in January 1997. One of its main functions is to ensure that all advertisements are checked to ensure that they reflect the department's commitment to representivity and make use of gender sensitive language. On the other hand, some departments (Housing for example)have not as yet created a dedicated department to address transformation issues, including HR.

In the Western Cape, the Chief Director of the Department of Corporate Services and Acting Head of General Administrative Services has employed a Special Programme Officer to assist departments in developing their own Affirmative Action plans, in line with the AA policy that was agreed with the unions at the end of August 1997. This officer is also involved in a consultative process to develop a coherent AA plan for the provincial administration as a whole.

4.4.6 Trends with Respect to Process

4.4.6.1 Job Planning

Job planning is a set of integrated processes and activities designed to assist organisations such as the public service in fulfilling their aims and objectives by enabling them to call upon the right kind of people; with the right types of skill, knowledge, qualifications and experience; of the right qualities and levels; in the right numbers; in the right jobs; in the right places at the right time and carrying out the right functions.

To do this effectively the organisation has to carry out a range of related processes. These include environmental scanning, the carrying out of a thorough audit of current skills and competencies, and projecting future personnel needs in line with national and departmental priorities and budgetary constraints.

The survey revealed that there was little systematic long-term job planning taking place in any of the departments or provincial administrations. According to one of the officials interviewed, this was because the combination of political vagaries, changing priorities, fiscal constraints and the strong influence of the external social, political and economic pressures made job planning a virtually impossible task to accomplish.

Most of the departments surveyed emphasised that the urgency of the initial rationalisation process (whereby the previously fragmented administrations of the RSA and the "Bantustans" were integrated into a unified service) meant that longer-term job planning had to take a back seat. This situation was further reinforced by the introduction in 1996 of the Government's "right-sizing" programme, including the now flawed voluntary severance scheme. Cutting rather than recruiting staff became the order of the day. And, as the DPSA acknowledges in its Provincial Report, many of these cuts were carried out in an arbitrary manner without real consideration for the effects on service delivery, rather than in accordance with the more cautious and systematic guidelines for right-sizing laid down in the WPTPS (see Chapter 3, Section 3.2.2.1 for more details). The Government has now acknowledged that the right-sizing exercise to date has been ad hoc, poorly coordinated and communicated, and ineffectively implemented. As noted in Chapter 3, a right-sizing team has been established within the DPSA to work out a more systematic and consultative approach.

Despite the problems experienced in job planning to date, some of the departments surveyed recognised its future importance. The Department of Housing, for example, expressed the view that a scientific investigation of the competencies required by departments had to be made. To this end the acting Director-General had submitted a proposal to the DPSA for EU funding This was for a multi-disciplinary team of consultants to develop a generic management model, to carry out an audit of existing competencies and capacities, and to identify the gap between this and the required competencies. The Department of Housing has, however, to look seriously at its levels of representivity and also the quality of its management echelon.

4.4.6.2 Recruitment

In national departments recruitment is normally carried out by the personnel services sections within the departments. In the provincial administrations the work is split between the line department concerned and corporate services (or the personnel component in the case of Education and Health). Line departments first notify corporate services or their personnel component of any vacancy. Once this is authorised, they then specify the duties involved in the post and request corporate or personnel services advertise the vacancy. Job descriptions are based on the PAS for the post, and little or no use is made of detailed person specifications. Corporate or personnel services will then draw up an advertisement for the post and have this checked by the department concerned.

In advertising, most departments and provincial administrations still rigidly adhere to the regulations laid down in the Staff Code, whereby entry level and promotion posts are first advertised internally (with external advertisement only taking place if there is no suitable internal candidate), whilst senior management posts are simultaneously advertised both internally and externally. In the case of the Western Cape, candidates from the region are given first preference. Some departments, however, have tried to operate more flexibly, especially when trying to attract a more representative field of candidates. Whilst some department use head hunting and recruitment agencies (Home Affairs and Housing, for example), others do not.

The processes used for recruitment seem to be very uneven. Very seldom is enough information given about the requirements of the job and the expectations to enable applicants to self-select. None of the departments surveyed provide information packs to applicants. Nor have any of them carried out research to monitor how effective the current advertisement strategies are in attracting applications from previously under-represented groups. There is therefore little consistency in the application of alternative approaches to recruitment. The PAS and Staff Code rules and regulations are applied to the letter by some departments and provinces ,while others have attempted to work more flexibly outside them.

4.4.6.3 Selection

Selection involves two key and related processes, shortlisting and interviewing. Both should ideally be governed by the following principles:

All applicants should be treated in an objective, equitable and consistent fashion;
Successful candidates should be chosen on merit in terms of their ability to meet the requirements of the selection criteria;
Selection procedures should pay strict attention to the AA guidelines laid down in the WPTPS;
The shortlisting and interviewing processes should be carried out in such a way that decisions can be objectively defended and justified if challenged.

The overall impression of the survey was that hardly any good practice guidelines exist to assist selection panel members with the shortlisting and interviewing processes. These activities were wrongly assumed to be fairly simple and straightforward, which anyone can attempt without too much difficulty and without the need for specialised training. Similarly no guidelines exist for the selection of panel members in any of the departments that were surveyed. In many cases panel members seem to be selected at the last minute without being given much information about the nature of the job.

Although interviewing is the most commonly used method of selection, there are other forms of selection testing and assessment that can be used, either as an alternative to the interview, or more usually as a complementary form of additional information and evidence. Hardly any of the departments use psychometric tests or assessment centres as these are increasingly seen to be culture specific and indirectly discriminatory.

Scoring systems are generally vague and unclear and it is not clear how decisions are reached. Similarly, guidelines on the use of referees are vague. Interviews are often based on the "sell-and-tell" approach, but seldom on a problem solving approach, which could assess the judgement and decision making capacities of applicants. Selection decisions often seem to be made on the basis of the interview alone and without a clear linkage to the requirements of the job. Once the selection process is complete recommendations are made by the line departments to the Head of the HR Directorate for approval and appointment. Candidates are then informed by a letter from the HR Directorate with a copy to the appropriate department head. This entire process can take anything between 3 to 6 months and in some cases good candidates have been lost because the process has taken so long (A detailed survey of blockages and delays that affect the whole recruitment and selection process is provided in the Recruitment and Selection Process Study, which was specially commissioned by the PRC and is attached to this report as Annexure 5).

Departments in both the national line departments and provincial administrations lack clear guidelines for the recruitment of AA candidates. AA appointments have been particularly rare in the Western Cape, with the PAS and fiscal constraints frequently being used to explain or justify this situation.

4.4.6.4 Placement and Induction

Induction is an important process which seek to integrate new members of staff into the organisation in such a way that they quickly become active, cooperative and productive members of the work force. The main aims of the induction process are to ensure that new staff feel welcome and valued; to provide them with the necessary information, advice, tools and equipment to carry out their work effectively in as short a time as possible; and to identify if they need any immediate forms of training or staff development to enhance their performance.

Most of the departments and provinces surveyed paid little attention to good induction and offered new staff members the barest minimum in terms of orientation. New staff are usually thrown in at the deep end and expected to learn on the job. The main exception was the Gauteng Department of Housing which has prepared an induction and orientation pack which includes information on benefits, the structure of the organisation, and other relevant pieces of information.

4.4.6.5 Probation

A probation period of one year is standard in the public service and is included in most permanent contracts of employment. The purpose of the probation period is to enable the organisation to monitor and evaluate the performance of staff and to take corrective action in the case of under-performance; to provide opportunities for staff who are under-performing to improve so that their work reaches satisfactory levels; and to enable the organisation to terminate their employment if they fail to reach acceptable work standards without recourse to complex and often time-consuming dismissal procedures. Quarterly probation reports are supposed to be completed in detail by supervisors and signed by the supervisor and employee.

In practice, probation does not seem to be taken very seriously in most of the line and provincial departments surveyed, in part because of the time constraints affecting busy supervisors and also in part because of the lack of training for supervisors. The result is that new staff who under-perform are very rarely weeded out at the probation stage.

4.4.6.6 Promotion and Career Pathing

Most of the departments in the study use the formal rules of the Public Service to reach out for promotion and a different career. The text book approach is preferred because of the nature of the work of the public service. It is considered to be specific, and staff need to work their way up the ranks to be really effective and gain the necessary knowledge and expertise.

4.4.7 Observations and Recommendations

The importance of HRP should be more widely recognised and acknowledged within departments, and its current "Cinderella" status significantly enhanced.
The systematic planning of HRP should be improved and linked to broader strategic policies and plans for HR, service delivery and representivity.
HRP should not be regarded as purely a personnel issue; line managers should be integrally involved along with HR specialists.
National policies that affect the staffing of the public service at a national or provincial level must be designed and communicated in ways that are clear, understandable and capable of effective implementation.
Clear HRP policies and procedures should be developed by departments and communicated to staff at all levels.
Recruitment and advertising policies should be designed to attract the best candidates possible from the widest pool, whilst at the same time enabling departments to promote a possible external image of themselves as progressive and caring employer. This will involve, inter alia:
- Writing and placing advertisements in ways which encourage all eligible and potential candidates to apply (including a special encouragement to applicants from previously under-represented groups);
- Providing more information to candidates about the nature of the job and the department;
- Providing candidates with a detailed job description, as well as a person specification setting out the key skills, knowledge, experience and qualifications needed for the job.
Departments should move away from requesting candidates to submit old Curriculum Vitae which frequently do not respond to the selection criteria required for the job;
All actual and potential recruiters (including line managers where appropriate) should be trained how to recruit, interview and select candidates in a way that empowers rather than disempowers candidates.
Clear guidelines on the shortlisting of candidates should be developed.
A common scoring system understood by all panel members needs to be developed within departments.
The same panel members should be involved from the start to the end of the recruitment process.
Comprehensive induction processes should be developed and introduced for all new staff.
Probation should be more actively managed to enable new incumbents to familiarise themselves quickly with their environment and their jobs.
The retention of capable staff should be a priority in all departments.

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4.5 Performance management and development

4.5.1 The Policy Context

The need to improve the quantity and quality of service provision in South Africa, whilst at the same time moving towards a leaner, right-sized and more cost-effective service, places a premium on productivity and performance. These issues have been discussed at some length in recent policy documents from the DPSA. The Green Paper on Policy Proposals for a New Public Service Statute (1996) calls for new and more effective forms of performance management. The White Paper on Public Service Training and Education (1997) and the White Paper on a New Employment Policy for the Public Service (1997) call for such systems of performance management to be dynamically linked to more effective systems of performance development. Acknowledging the importance of such a linked approach, this section of the report will nevertheless focus primarily on the management of performance. The next section will focus more specifically on issues to do with performance development.

The central themes of the new policy towards performance management, as outlined in the Green Paper on Policy Proposals for a New Public Service Statute (paras 2.6 and 2.7) are as follows:

"Replacing the excessive centralism of the current system of public administration with an approach that permits maximum departmental autonomy and managerial responsibility within a coherent national public service."

"Replacing a rule-bound culture of work with one that is goal-orientated and promotes efficiency, development and the effective delivery of services."

"The creation of a systematic approach to accountability in which indicators are developed for measuring, monitoring and evaluating the quality of performance of institutions and employees."

These new decentralised systems and processes of performance management will be based on accountability for specific, measurable outputs within defined time frames, and will also will be incentive-linked, specifically to remuneration and promotion. This involves an important shift in the focus of management processes from how something is done to what is achieved. This shift, from a rules-based to an results-based system, will be based on a prior process in which predefined objectives are specified in a mutually agreed performance contract between supervisor and employee. This new system will be supplemented by a more general stress on the need for work to be mission-driven and on the importance of staff development and training processes.

4.5.2 Existing Systems of Performance Management and Appraisal

To date the main system in place for performance management and appraisal has been the system spelt out in the Public Service Staff Code (PSSC), involving the quarterly recording of critical incidents an annual appraisal. In the past this was tied to the system of merit awards for promotion purposes. At the higher (management) grades the critical incident reports are completed by the employees themselves.

Although a number of departments are still making use of this system, very few of the officials interviewed felt that it provided a reliable or effective means for assessing performance. Nor did it provide a useful basis for determining future staff development and training needs. Where the system is used today, it is therefore regarded more of an administrative chore than a useful management tool. Criticisms voiced about the PSSC system include the following:

It is not based on agreed and measurable performance criteria linked to service outcomes;
It is prone to subjective bias in terms of both the preparation of the critical incident reports (especially when completed by the employees themselves) and their evaluation;
It tends to reflect diligence and skills in report writing rather than in actual performance;
It is punitive rather than developmental in general orientation;
It is insufficiently linked to other HR functions and systems.

4.5.3 PPMS - A New Approach to Performance Management

The DPSA is encouraging the move towards a different approach to performance management, the Personnel Performance and Management System (PPMS). Based on the "management by objectives" (MBO) approach which has been used (albeit with varying degrees of success) in many countries, this system is based on the agreement between supervisor and employee of key performance objectives, targets and measures, against which the performance of the employee will be evaluated. Such objectives and measures can and should be linked to the broad service objectives of the department. The system can be tied to incentives (promotion, additional increments) for those employees who meet or exceed their targets, or to the agreement of future staff development and training needs, or both.

The PPMS system was identified by the DPSA and members of the Gauteng Provincial Government, and developed by consultants. Gauteng is presently piloting it. A workshop was held with all provincial and national managers to introduce the system. This system was then to be negotiated through the National Bargaining Council. The unions have, however, not agreed to its adoption as national policy. It appears that DPSA also believes, at this point, that one uniform system should not be applied across the public service. Instead it may opt for a more flexible approach, where the DPSA would only develop broad guidelines on "best management practice" and leave it to individual departments and provinces to decide how to translate these into systems. This change does not seem to have been formally conveyed, however, to departments and provinces. Most are not currently assessing alternative approaches and systems for their appropriateness and relevance to their needs, but are still waiting for word that the National Bargaining Council has endorsed the system.

Given the international experience with MBO approaches, the flexible and cautious approach adopted by the DPSA seems sensible. Whilst the general usefulness of MBO as a learning and development tool is widely recognised, its utility as a management tool has often be regarded as problematic. MBO systems have worked reasonably well in situations where the organisational goals and the purpose of the job are clear, where tasks are simple and fairly routine, where outcomes are predictable, where performance is observable and measurable, where the criteria are set solely by the appraiser and appraisee, where mutual trust is the norm, and where supervisors are well-trained to carry out their tasks. They have worked much less effectively, however, in situations of uncertainty, complexity and rapid change where many of the above conditions simply do not apply. Such situations are increasingly common in many countries, including contemporary South Africa.

Where MBO approaches are linked directly to incentives, additional problems have frequently been evident. Staff may well be inclined to prioritise those dimensions that are measured or measurable. Real problems may be hidden for fear of a negative appraisal. And the interaction and relationships of staff may be marked by competitiveness, conflict, non-cooperation and attempts to reduce interdependence rather than collaboration and team work. Because of such problems, many public sector theorists are now suggesting that the adoption of incentive-linked performance models derived from the private sector has led to a downplaying of values specific to the public sector, such as ethics and probity, and contributed in some cases to social unresponsive, irresponsible and corrupt behaviour. Many public sector observers are increasingly stressing instead the vital importance of culture as a mechanism to ensure coherence of judgement, decision and action through the development of shared norms and values and the socialisation of new entrants into this culture.

4.5.4 Trends in Departments and Provincial Administrations

Only one out of the four national departments covered, the Department of Welfare, has begun to develop its own policy, which is an amalgam of the old incident based system, specified in the Public Service Staff Code (PSSC), and the new policy proposals. The system envisages a process of quarterly reports drawn up after performance review meetings between the staff member and supervisor. It ends in an annual appraisal meeting. It is developmentally focused, rather than punitive, but substandard performance after training and development would lead to disciplinary action. Guidelines on how to use the PPMS system will be provided to managers in November 1997. The system for rewarding merit specified in the PSSC is still in use.

The other departments surveyed were still using the PSSC system though not systematically and without real enthusiasm. As a result compliance by supervisors in operating quarterly reports is low. In the Department of Housing the merit award process was used but has recently been suspended when the budget provision for this was frozen. The Department of Home Affairs still makes use of critical incidents reports but finds this time consuming, open to nepotistic distortions, not relevant to the objectives of the department, and essentially a waste of resources.

The Department of Welfare has sent managers for training in the PPMS system at SAMDI. Along with Housing and Home Affairs, the department recognises the inadequacies of the current PSSC system but is also somewhat sceptical about the new PPMS approach. All three departments felt that the PPMS system was too "theoretical" and were worried about the possible introduction of one uniform approach. Instead they believed that different approaches to performance management need to be developed to suit the distinctive needs of different departments, sections and occupational classes.

At the provincial level, departments in the Gauteng Provincial Government are in the process of implementing the Personnel Performance Management System (PPMS). This was developed by the Province with support from the Commonwealth. It has been agreed in the Provincial Bargaining Chamber. This system follows fairly closely the outcomes based approach outlined in the new public service policy. All staff have been through one day of training in the system and supervisors have had a further half day of training. In the process of negotiating this through the bargaining chamber, an agreement was made to have completed all evaluations of all staff in the Province by the end of November 1997.

Most of the Gauteng departments surveyed indicated that they intended to operate PPMS in a developmental way, linked to staff development and training as well as to strategic plans for service delivery, representivity and gender equity. They recognised, however, that this would stretch the current capacity of supervisors and HR sections.

In the Western Cape, as in Gauteng, the HR capacities and decisions and functions are still generally centralised to the provincial Department of General Administrative Services (DGAS), and budget decisions affecting HR are made by the Cabinet. The DGAS is in the process of developing a performance management system intended to increase the efficiency and professionalism of service delivery in the Province. They are negotiating the criteria for performance evaluation with the unions at present. Staff throughout the Province will then contract with the CEO/DG on performance targets and indicators. Outstanding performance will be rewarded in relation to their achievement. Those who under-perform will be subjected to disciplinary action. Salary progression will no longer be automatic and will depend on adequate performance. R25 million has been set aside to reward performance. A major stress in the criteria used is on professionalism and efficiency at all levels.

At the same time, at least one department, Social Services, is developing its own performance management system. They have set up a committee to discuss and systematise performance management and the assessment of promotability. The criteria used are similar to those specified in the PSSC, skills, knowledge, experience and training. "Credentials and work performance" are said to also count in this process. A system of ranking is used with a points system related to the criteria. A score of 69% will, for example, mean that the staff member is "promotable." This process is also linked to the award of merit increases using the two additional notches. All employees start on notch one. The system has been linked to a comprehensive and relatively participative process of strategic planning which started with an assessment of the needs of beneficiaries, goal setting and an identification of internal change requirements to achieve goals and the development of an HR plan. This process has produced a major shift in orientation, from administering ongoing ameliorative grants to a more proactive, developmental partnership with communities, designed to build community capacity to sustain their own needs. This involves a major programmatic, budgetary and capacity change.

The ongoing division of responsibilities between the provincial structures and the departmental ones is seen by departments such as Social Services to be a real problem. Departments, for example, will conduct the basic processes of reviewing performance and probation, but the responsibility for making the final decisions on this will continue to rest with the DGAS. The availability of budgets and freedom to allocate them is a further problem. The main budget for HRM and HRD will continue to reside with DGAS. The departments will have very limited HR budgets of their own. This is a problem in that, given the major and paradigmatic shift in policy orientation of the department noted above, major organisational redesign and capacity building will need to be undertaken. There is a sense that the DGAS and its Personnel and HR Directorates are not always able to understand the strategic imperatives of individual departments. It will be difficult to adopt a flexible and developmental approach to performance improvement under such circumstances.

4.5.5 Observations and Recommendations

The new focus on assessment of outputs and results is to be welcomed as a move beyond the inward-looking and procedure-based approach of the past to a focus on achievement. However, its assumption of "one right way" to manage in all circumstances is problematic. This is particularly the case in situations where public sector managers are facing huge pressures and are yearning for quick solutions. Whilst it is difficult to draw many firm conclusions from the limited data that could be collected within the time constraints of the survey, the following tentative suggestions are made as a contribution to a possible way forward.

The DPSA should initiative broad-based discussion of the alternatives available to ensure accountability and coordination across the public service. The advantages and disadvantages of different models of performance management should be evaluated during this process.
Alternative mechanisms for performance management, which might be considered, include:
- the direct supervision of work in circumstances where this kind of support is needed;
- the professionalisation of front line staff where complex judgements are required through intensive education and training programmes designed to develop specialised knowledge and skills within a framework of normative professional pride in expertise;
- the use of project teams composed of specialists with either academic or experience-based expertise where a problem solving approach is required and therefore results cannot be predetermined;
- The development of organisational culture as a mechanism to ensure coherence of judgement, decision and action through the development of shared norms and values.
Resources should be made available for intensive management and other staff development processes.
A comprehensive management development programme should be initiated, not to train managers in one system or model alone, but to introduce them to a variety of mechanisms for co-ordinating work and improving performance.
A phased approach to performance management should be adopted, linked to the overall transformation of the public service, and the specific transformation and service delivery goals of the department. The responsibility for this process should lie either with Heads of Departments or be located in the HODs office.
The mechanisms designed to improve, develop and manage performance should be continuously reviewed and assessed for their effectiveness. The capacity to do this should also be built internally (rather than relying exclusively on outside consultants).
In the interim, the PPMS should be used as a tool for communication, support, learning and development of individual staff, units and the organisation. PPMS can assist, if it is orientated in this way, in helping departments understand the implications of the major policy changes and in monitoring the effectiveness of the pattern of strategic decisions and actions. If it is to play this role, however, it should not be conceived as a control mechanism and linked to financial incentives.

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4.6 Human resources development

4.6.1 The Policy Context

According to the White Paper on Public Service Training and Education (WPPSTE, 1997), the HRD systems inherited from the former regime were fragmented and poorly coordinated, and characterised in the main by a lack of a strategic, needs-based, and outcomes-based focus, as well as by the inappropriate nature of the training and education provided by many in-service and external providers. Given the urgent need overcome such problems and to build individual and institutional capacity for the new public service, it is not surprising that most of the key national policy documents (and especially the RDP White Paper and the WPTPS) have highlighted the vital importance of developing a coherent and coordinated HRD strategy for the service.

A major step in this direction was taken with the publication by the DPSA in 1997 of the WPPSTE. The principal aim of this White Paper is to establish a clear vision and policy framework to guide the introduction and implementation of new policies, procedures and legislation aimed at transforming public service training and education into a dynamic, needs-based and pro-active instrument, capable of playing an integral and strategic part in the processes of building a new public service for a new and democratic society in South Africa. The anticipated outcome will be a new system of public service training and education that will be:

strategically linked to broader processes of transformation, institution building and human resources development within the public service;
strategically linked to the NQF and SAQA frameworks, as well as to the Department of Labour's proposals for a new Skills Development Strategy;
strategically planned and effectively resourced;
based on the elevation of the importance and status of training and trainers;
effectively organised, coordinated and accredited in ways which promote quality, accountability, transparency and cost-effectiveness;
flexible and decentralised within national norms and standards;
capable of promoting uniform outcomes through a multiplicity of accredited providers;
capable of promoting access by all personnel to meaningful training and education opportunities;
capable of promoting the empowerment of previously disadvantaged groups;
capable of facilitating the development of effective career paths for all public servants;
demand-led, needs-based and competency-based;
capable of promoting positive learning outcomes which add value to individual and organisational capacity.

Whilst this document concentrates on the provision of formal training and education opportunities, it nevertheless recognises the key role that can be played by less formal though no less important forms staff development, especially through on-the-job learning opportunities such as coaching, mentoring, work shadowing, job rotation, job enrichment, and participation in multi-skilled project teams.

In short, the main purpose the WPPSTE is to enable departments to design and implement training and education on the basis of their strategic priorities. This position requires that certain key business processes and basic organisational structures be put in place in order for training and education to effectively fulfil this strategic role.

Three points demonstrate the pivotal role that the WPPSTE is likely to play in assisting national and provincial departments develop comprehensive HRD strategies and programmes.

The policy option adopted by government is the scenario of centralised setting of norms and standards, with decentralised provision by state and non-state providers in a competitive framework. This is a position argued to provide a combination of creativity and flexibility at the delivery end without at the same time undermining the need to build a unified public service with a common culture and value system.
The WPPSTE provides for the review of statutory and other regulatory instruments and frameworks in order to facilitate efficiency and accountability in HRD in the public service. This will enable departments to integrate human resource development planning and implementation into new approaches to the overall management of resources. Further, this will enable departments to clarify and implement linkages between skills development, grading and accelerated professional progression in areas of critical skills shortage.
The WPPSTE also provides for the development of a formula to ensure that a ratio of the overall budget of a department is dedicated to training and education (the White Paper suggests that this could be one per cent of each spending agency's previous years total budget). This will enable departments to reflect the strategic importance of training and development in the allocation of resources, taking into account the flexibility introduced by the Medium Term Expenditure Framework.

4.6.2 Departmental and Provincial HRD Policies

A number of the national departments surveyed (for example Justice and Home Affairs) had incorporated policies for HRD within their broader strategic plans for transformation. This is in line with the recommendation in the WPPSTE which calls for such strategic integration. The Department of Justice, for instance, has seven key strategy clusters in its Justice Vision 2000 document. HRD is one of these. In relation to the other strategy clusters (for example representivity and efficiency), the document identifies core and generic programmes for inclusion in the department's training and development strategy.

Similarly, the Department of Home Affairs' draft Transformation Policy document stresses that "education, training and development should constitute a key ingredient of public sector transformation. It should be continuously re-focused in order to remain a rapid lever for change and should be pro-active and visionary with a problem-solving orientation." These two departments indicated that they planned to customise and incorporate the key recommendations of the WPPSTE into these overarching strategy documents.

Other national departments (Housing, for example) have not yet developed policy positions in respect of human resource development. In some cases, a regimented approach is preferred, whereby management indicates the need for White Paper and Green Paper processes to translate into legislation or other gazetted regulatory instruments before they use them as a basis for planning or decision-making.

With respect to the provincial administrations surveyed, the centralised nature of human resource services in the provinces seems to undermine both flexibility and support for capacity building within departments. Provincial corporate services or general administration departments are currently unable to provide a comprehensive provincial policy framework. They are therefore tending to rely on the framework suggested in the WPPSTE, with the role of corporate services devoted largely to support in planning and capacity building.

The disparity among departments and provinces in terms of both overall progress in transformation and specific areas such as training and education places a challenge on the DPSA to continue supporting the transformation of the public service as a whole whilst paying special attention to departments struggling with basic issues of policy and implementation. In this context it will be vital for the DPSA to secure funding and implement as soon as possible the various institutional support programmes identified in the WPPSTE.

4.6.3 HRD Planning

From the survey it seems apparent that departments that have developed a transformation document are more likely to use the identified strategic priorities as a basis for human resource development planning than those without. This suggests that there is need to provide support to the latter departments to either initiate or complete development of their transformation (White Paper) positions. This will reinforce a synergistic and strategically integrated approach to the planning of human resource development.

In order to address the long-term capacity needs in a comprehensive manner, it will be necessary for departments to start utilising multi-year planning cycles. The Medium Term Expenditure Framework (MTEF) provides an opportunity for rationalisation of human resource development planning. Amongst other things, this will need to cover such issues as succession planning, career pathing and representivity imperatives.

In this regard, the planning cycles of line functions provide a key point of reference for human resource development planning. The line function linkages provide the most direct reflection of the strategic role of training and development in supporting the core business of a department. However, many departments have not yet started utilising these linkages for the planning of human resource development. Some cite the mandatory use of SAMDI for training and development as a factor distorting their planning in that they are not able to exercise full control of their human resource development budget and the nature of courses they can use.

Use of needs assessment to determine the nature of programmes and their design is inconsistent. Whilst departments such as the national Department of Welfare and the Department of Justice conduct this on an on-going basis, some departments, for instance the national Department of Housing, do not yet view this as an integral part of capacity building strategies for both the national and provincial departments.

Similarly, the use of benchmarks in planning has not as yet been formalised. The absence of best practice guides for departments and the shortage of appropriate skills in human resource development units help to account for this. Moreover, most departments have not as yet set up systematic mechanisms for monitoring and evaluating the effectiveness of training and education programmes, nor have they made much progress in the development of baseline competencies for trainers and trainees. Progress towards standardisation through the definition of both competencies for the job and generic competencies has also been slow.

4.6.4 HRD Programmes

Most departments and provinces use three main approaches to training and education, as follows:

In-service training. This takes various forms, including training of trainers and mentorship programmes.
Formal courses at educational institutions. This form of training and development is supported by bursary administration that is conducted by the HR or personnel component of the department. The identification of courses is not conducted in a systematic standardised fashion. This is an area in which optimal use of resources needs to be supported by norms and standards.
Secondment to other government structures or private sector organisation with specialist skills. This is particularly relevant for addressing areas of critical shortage of skills.

Whilst a few departments have tentative multi-year plans related to human resource planning projections and the MTEF, most still have plans confined to the annual budget cycle. This is reflected in the programmes for the different levels of personnel currently available. These largely consist of programmes for:

Senior management: most training at this level is conducted on an ad hoc basis. Part of the reason for this is that human resource development personnel are usually in lower echelons of the department and feel incompetent to determine management training and education for higher levels.
Middle and Junior management: SAMDI generic courses are largely used for this level. However, there is usually little or no consistency in the use of a department's strategic priorities as a basis for determining suitability of courses.
Professional and Technical Staff: bursaries are usually available for formal training in tertiary institutions, although the choice of courses and programmes is not always undertaken on the basis of a systematic and comprehensive needs assessment.
Support Staff and Lower Grade Workers: are usually provided with training, if at all, in an ad hoc fashion. There are no linkages between the training of lower grade workers and career management or succession planning.

Courses offered to the whole department include change management and the management of diversity. HR and personnel staff attend training of trainers programmes run by SAMDI, as part of internal capacity building programmes.

It is apparent from the above that there is currently an insufficient link between the needs of individuals and departments on the one hand and the training programmes provided on the other. This is the case even in those departments that do carry out such needs assessments.

4.6.5 The Role of SAMDI

Perceptions about the role, image and status of the South African Management and Development Institute (SAMDI) in the administration, design and delivery of courses/programmes varied from reasonably positive to quite negative. The reason for departmental and provincial concerns about the role and functions of SAMDI are in part historical. In the past SAMDI's predecessor, the Public Service Training Institute (PSTI), had a near monopoly over in-service management training for the public service, and exercised this in a very prescriptive and supply-driven fashion, allowing little opportunity for departments and provinces to have a say in the determination of their own transversal training needs.

Concern was also expressed by departments and provinces about the lack of clarity with respect to the role, responsibilities and functions of SAMDI in relation to provincial training bodies and external training providers. Such confusion is exacerbated by the nature of South Africa's transition and the consequent absence of firm policy guidelines in this regard. This seriously hampers the provision and delivery of training, resulting in no training taking place at all in some instances, and unnecessary duplication in others. Where training does take place, it tends to be executed on an ad hoc or crisis intervention basis without clear strategic goals.

The need to challenge SAMDI's monopoly by encouraging wider participation in the provision of public service education and training was emphasised in the WPTPS, and has since been enshrined in the revised Chapter L of the Public Service Regulations (December 1995) and the WPPSTE. The rationale is that if SAMDI competes with other providers, this will serve to promote the improvement and quality of its courses. Since the end of 1994, the composition, structure and role of SAMDI has been under review, and an extensive process of restructuring is currently underway to enhance the relevance, quality and effectiveness of its programmes, and to pave the way for its successful operation in a more competitive environment.

Despite this process of review, the Commission was not convinced that SAMDI, as currently constituted, has the capacity to effectively undertake the on-going process of public management training. We therefore believe that a more appropriate future role for SAMDI would that of a coordinator of training and education, rather than a direct provider. As such SAMDI, which is already responsible to the Minister for the Public service and Administration, could be further restructured to become a unit within the proposed Office of Public Management. Alternatively, consideration could be given to transforming SAMDI in a Sector Education and Training Organisation (SETO) for the Public Service, with a key role in the strategic planning, coordination and accreditation of public service training and education (the role of SETOs is outlined in the Department of Labour's Green Paper on A Skills Development Strategy and the WPPSTE).

4.6.6 Financing HRD

Budgets for HRD are small by international standards. In the departments surveyed the ratio of HRD budgets to the overall departmental budget ranged between 0.02% (national Department of Housing) to 0.3% (Department of Home Affairs). In most departments such budgets are not generally determined as a proportion of the overall budget of a department. This is much less than the 1% proposed in the WPPSTE. No time frames have be set so far in the departments surveyed for phasing in the system recommended in the WPPSTE.

The process for determining the HRD budget varies from department to department. In some departments this task is carried out by the DG and senior management, whilst in others it is undertaken by a cross-sectional committee set up for this purpose.

4.6.7 HRD Structures

With the exception of the department of Justice, which has a Deputy Director-General for human resource and Chief Director for human resource development, personnel in human resource development units tend to be found in the lower echelons of the department, usually at Deputy-Director level or lower. This often has the effect of limiting the focus of their work to staff at their level or below them. Their exclusion from certain key structures for determining departmental strategy contributes to the absence of necessary linkages between training and education and strategic and line priorities.

4.6.8 Observations and Recommendations

There is a need for a general alignment of resource allocation with strategic priorities of the public service. Policy should be operationalised through the consistent use of the departmental policy framework as the initial reference for all planning activities.
There is a need for departments to develop and utilise transformation policies and documents (such as departmental Green and White Papers), in which the role of human resource development is clearly defined. These documents should then be utilised as the main reference point when initiating plans and programmes for human resource development.
The role of Corporate Services in human resource development should be focused on the provision of advice and support in planning and capacity building. This will include consistent reference to the strategic priorities of the province in identifying the broad training and development programmes.
The DPSA should consider including guidelines on policy formulation and implementation with respect to HRD in the proposed management guides which will shortly replace the PSSC.
Departments should utilise multi-year planning cycles. The Medium Term Expenditure Framework (MTEF) provides an opportunity for rationalisation of human resource development planning. Amongst other things, this will cover succession planning, career pathing and representivity imperatives.
There is need for departments to exercise greater flexibility in the sourcing of training and education. If departments conduct needs assessments systematically and consistently, it should be possible to fully rationalise the role of SAMDI and other training and development providers.
Systematic use of benchmarking should be introduced in departments in line with the competency-based approach to human resource development envisaged in the National Qualifications Framework.
Departments need to develop and consistently utilise more effective monitoring and evaluation formats.
There is a general need for the development of a comprehensive set of training and education programmes by each department. This would ideally be based on needs assessment, linked in turn to the strategic priorities of the department, and integrated into the budget planning process.
There is a need for standardising the involvement of line function in determining programmes. This is related to the integration of human resource development into the broader planning cycles of the department.
In addition to in-service training and education and formal courses, there is a need to increase the use of secondment and other informal staff development initiatives (such as work shadowing and mentoring) as a strategy for rapid skills development, especially in areas of critical shortage.
For lower grade workers, it will be critical to utilise linkages with the National Qualifications Framework for developing career management and succession planning.
The urgent need for an assessment centre or assessment processes is indicated by the career management and succession planning imperatives indicated in the White Paper on a New Employment Policy for the Public Service.
SAMDI, as currently constituted, does not have the capacity to effectively undertake the on-going process of public management training; accordingly its staffing and infrastructure should be rationalised and its role and location clarified. One possibility is that SAMDI could be incorporated as a training and education unit in the proposed Office of Public Management.
The Commission recommends that SAMDI should cease over time to be a direct provider of training, and confine its functions instead to ensuring that public management training needs are met by other appropriate providers, especially the Schools of Public Management at tertiary institutions, but also including competent training providers in the private and NGO sectors. It should also oversee the maintenance of high standards befitting the requirements of a professional civil service.
Consideration should also be given to transforming SAMDI into a Sector Education and Training Organisation (SETO) for the Public Service (as proposed in the WPPSTE), with a key role in the strategic planning, coordination and accreditation of public service training and education.
It will be necessary for the DPSA to assist departments in developing an approach or formula for determining the ratio of the HRD budget to the overall departmental budget, in line with the proposals in the WPPSTE.
HRD needs assessment should be taken into account in the budget planning cycle.
A medium term personnel expenditure framework should be developed to detail the financial implications of human resource strategy. These should be consistent with the MTEF as a whole.
The strategic importance of human resource development should be reflected in the status or, at least, the reporting line of the responsible staff or managers. Ideally, there should be a direct line of reporting to the Director-General. Participation of transformation programme staff in key HRD management meetings and planning processes should be standardised.

Chapter 5: Budgeting and financial management

Introduction
Government expenditure and the budget
The domestic and global context of budget reform
Developments in budgeting and financial management
Issues and challenges for further reform
Observations and recommendations for further reform

5.1 Introduction

5.1.1 The Importance of Budgeting

Government budgeting consists essentially of two things:

Determining what money is available for spending (i.e. the total of anticipated revenues plus the amount of money that it is prudent to borrow);
Determining what programmes and services to finance (present ones, plus high priority new ones, minus low priority old ones, and minus administrative economies).

In South Africa, where there are three spheres of government -- two of which (provincial and local) rely substantially on revenues that are levied and collected by the National Government, and where constitutionally these revenues must be divided between them -- there is an additional step to budgeting. This is the determination of the share of the national revenues that will be allocated to the national and provincial governments. This is aside from the share of the national and/or provincial revenues that will in the future be allocated to local governments to supplement their own locally collected revenues.

Budgeting is therefore important because the way in which such issues are determined will obviously impact significantly on the material well-being of citizens, as well as on the prospects for the achievement in South Africa of the key goals of reconstruction and development, economic growth and macro-economic stability, and community empowerment and democratic consolidation.

5.1.2 The Importance of Financial Management

Financial management typically consists of the following elements:

The accounting system, including the form of accounts and account classification
Budgetary and expenditure control
Financial planning and reporting
Cash flow management
Management of assets and liabilities
Financial control, particularly payroll control
Procurement policy

Sound financial management is also vital as a necessary complement to the budgeting process, and in particular to ensure that taxpayers' money is used in an efficient, cost-effective, responsive and accountable way. In developing improved financial management systems, attention internationally has focused in particular on the increasing use of computer technology, the development of staff capacity, and the introduction of mechanisms to promote greater probity, accountability and transparency in the use of public funds.

5.1.3 The Importance of Planning

Effective planning of the budgetary and financial processes is clearly important, not only in its own right but more especially as an integral part of broader strategic plans for social and economic development. If the policy and strategic planning processes are not fully synchronised with the budgetary and financial processes, the likelihood is that policies will be introduced without the necessary funds or capacity for their successful implementation, with the attendant risk of popular frustration and unrest.

The heart of planning and budgeting is how government goes about translating its vision -- its objectives and goals, such as the RDP programme -- into specific policies and programmes and services, and then into operational plans; and how it goes about staffing and financing them over time. This includes such difficult choices as which services should enjoy priority over others; which services will have to be phased in over time; and which new or improved services must be deferred.

5.1.4 Purpose and Structure of the Chapter

The purpose of this chapter is to review the developments that have taken place in budgeting and financial management since 1994 with a view to highlighting strengths and achievements that can be built upon in the future, as well as weaknesses and problems that still need to be overcome. In the process, the following issues will be covered:

Government expenditure and the budget;
The domestic and global context of budget reform;
Current developments in budgeting and financial management;
Issues and challenges for further reform;
Recommendations for further reform.

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5.2 Government expenditure and the budget

5.2.1 The Impact of Government Expenditure

Government expenditure plays a central role in influencing economic and political outcomes in society. In the first place, it is the largest single component of demand in the South African economy and amounts to about one-third of GDP, when expenditure on all three spheres of government is incorporated (national, provincial and local). Changes in government spending therefore impact significantly on aggregate demand in the economy, and hence on the level of economic activity and the GDP itself.

Secondly, in addition to affecting economic growth through the demand-side of the economy, government expenditure has a significant impact on the growth rate of the economy, through the supply-side. The delivery of public goods and services to households and firms, such as infrastructure, education, or security, are essential complementary factors in the production process, affecting the level of productivity and efficiency of capital and labour inputs.

Thirdly, the level and composition of its expenditure are also a reflection of a government's political priorities and objectives, particularly with regard to the important issue of redistribution. The Government can affect the welfare of different groups in the society through its provision (or non-provision) of goods and services to members of these groups, so that there is a close link between the budget and policies towards redistribution, poverty alleviation, and inequalities between genders, racial and ethnic groups, and regions.

5.2.2 The Objectives of Public Expenditure and Management Systems

The broad objectives of public expenditure budgeting and management systems follow from the above three impacts upon economic and political outcomes. These objectives are:

To effectively control the fiscal expenditure aggregates to support macroeconomic stability as far as possible. Without such controls, there will be the risk of large unsustainable fiscal deficits, expressed for example in the form of inflation, balance of payments deficits and high interest rates.
To achieve technical efficiency in the delivery of public goods and services, that is, to achieve outputs at the lowest possible cost. This affects both the growth and redistributive objectives identified above. The greater the efficiency in the delivery of public goods and services, the more effective their contribution to the productivity of other productive processes, and hence the greater the contribution of the public sector and government spending to the rate of economic growth in the medium term. Similarly, higher efficiency in the delivery of redistributive goods and services is likely to enhance their impact on poverty alleviation and welfare improvement.
To achieve allocative efficiency in the distribution of public resources, that is, to achieve the highest possible level of social welfare, given the needs and demands of the population, and government's political priorities. Since demands always exceed resources available, the issue here is to determine the composition of public spending -- the choice of which goods and services to provide, and at what level -- and manage the trade-offs amongst its components in a manner which best meets the public interest, but inevitably leaves some demands unsatisfied. An inefficient outcome in the allocative sense could result in a drop in support for the Government, or to an increase in social conflict, as groups dispute the particular trade-offs chosen and the sacrifices these entail. As with technical efficiency, allocative efficiency is concerned with both the growth and redistributive dimensions of public spending.

5.2.3 Achieving these Objectives

How can these objectives be achieved? Current "best practice" based on international experience focuses upon the appropriate structuring of the different incentives faced by the various actors in the budget and public expenditure process -- decision-makers, public servants who implement and manage the process, public servants who monitor the process, and consumers of public goods and services -- to produce the desired behaviour in each. Considerable emphasis has also been placed on the introduction of various mechanisms to achieve transparency and accountability which can ensure adherence to decisions and help to optimise performance in their implementation.

There are of course wide disparities amongst procedures in different countries, even amongst those, like Australia, New Zealand and the United Kingdom, which have undertaken far-reaching budget reforms in recent years, and are regarded by many as standard-setters in this respect. It is also worth noting that there are important differences between these long-established democracies and a newly-democratic society like South Africa. In the latter, for example, practices and processes in democratic institutions such as Parliament or political parties are less well-established, while principles such as transparency of government activity and accountability of officials are more fragile.

A number of key issues are highlighted below. These emerged from the Commission's study of the budget reform processes in countries such as Australia, New Zealand and the UK.

5.2.3.1 Achieving Fiscal Discipline

Control over the fiscal expenditure aggregates tends to require a high degree of centralisation of decision-making. The decision-making agent -- whether the Finance Minister alone or a Cabinet finance sub-committee comprising key central (non-line) ministers -- needs to be strong enough to impose its decisions on the line ministries. Its ability to do so will be enhanced by the use of a medium-term framework, which illustrates the interaction of budgetary decisions and macroeconomic outcomes, and even more so by the existence of explicit pre-set limits on spending and on deficits which, in turn, will be more powerful if they are legally binding. Accountability occurs through the explicit public comparison of budgeted and actual fiscal aggregates, and of projected and actual macroeconomic outcomes. The Finance Minister can be made personally accountable for fiscal performance reflected in this comparison, which is the case in New Zealand.

5.2.3.2 Achieving Allocative Efficiency

The objective of allocative efficiency requires a combination of centralised and decentralised processes. Overall decision-making needs to be centralised within the Cabinet, perhaps in the form of a "strategic planning and priorities" sub-committee, which would include some line ministers. This committee would have to evaluate policy-based programmes, examining their costs within the constraints of the medium-term framework and the overall fiscal aggregates, and lay down broad spending allocations or ceilings to the line ministries.

Because achieving allocative efficiency is inherently a political process, there needs, however, to be a wide process of decentralised information collection and consultation prior to the actual making of decisions. This takes place through institutions such as parliament, corporatist bodies such as the National Economic Development and Labour Council (NEDLAC) or social partnership forums, as well as through direct contact with the public. Information is collected about needs and demands of different constituencies and groups, while at the same time an attempt is made to build consensus about acceptable trade-offs between conflicting demands.

The decentralised nature of the process, together with the focus on policy programmes, implies a very active role for line ministries and departments in this aspect of the budgeting process. This role can be extended, as has occurred in Australia, by enabling line departments to make programme allocation or re-allocation decisions within their total allocation from the Cabinet.

As the above suggests, allocative efficiency also requires an emphasis on policy-linked programmes, which embody clear connections between the determination of priorities, strategic and operational planning, budgeting and financial planning, and performance and financial management. From an allocative efficiency perspective, programme outcomes reflect whether public needs and demands have been met, and whether government's political priorities have been achieved.

Accountability for the broad allocative decision rests with the centralised decision-making body within Cabinet and relies, as in the case of overall fiscal control, on explicit public comparison of budgeted and actual outcomes, together with the monitoring and evaluation of programme outcomes. Naturally, institutions and bodies involved in the information collection and consensus-building process also have a central role to play in the accountability process. Accountability for allocations and re-allocations within line departments rests with the individual ministers concerned. A medium-term budgeting framework can enhance accountability in allocation decisions by facilitating comparison between last year's budgeted estimates and this year's actual expenditure outcomes, as well as between last year's forward estimates and this year's budgeted allocations. To the extent that budgeted allocations are in effect agreements over trade-offs during a three year period rather than over a single year, failure to adhere to the agreement over the past year can be more effectively sanctioned by other parties to the agreement, through mid-term adjustments.

5.2.3.3 Achieving Technical Efficiency

Technical efficiency is best accomplished by a thoroughly decentralised process giving line ministries a high degree of autonomy over programme implementation and management. As with allocative efficiency, the focus is on programmes, and hence with the linked steps of strategic and operational planning, budgeting and implementation. However, technical efficiency evaluates the relation between programme inputs (public servants' labour, use of public buildings and consumed goods and services) and programme outputs (the public goods and services delivered by the programme), in contrast to the concern of allocative efficiency with programme outcomes (the broader social impact of the outputs on public welfare).

The achievement of technical efficiency is more of an operational issue than a political one, so that decisions about how to allocate financial resources are best made by managers in the delivery departments, rather than by central agencies. For optimal effectiveness, this would require greater delegated powers for managers over hiring and firing decisions, as well as procurement issues.

Accountability mechanisms for the effective decentralisation of implementation depend on the timely availability of independent financial and performance audits. Accountability also rests on managers being held personally accountable, via performance-based contracts, for delivery of outputs.

It should be noted that the three objectives of fiscal, allocative and technical efficiency are not independent. Each interacts with and affects the others. The relation between outputs and outcomes reflects the interface between allocative and technical efficiency, between technical and political issues, and between ministries and their associated departments.

5.2.4 Budgeting and Financial Management in South Africa

The principles articulated in the previous section point towards a system of budgeting which:

Is heavily decentralised, especially at the operational level, allowing line department managers substantial autonomy within broad allocative decisions made centrally;
Closely integrates the strategic, operational and financial aspects of the policy process, in regard to the dimensions of planning, implementation and monitoring;
Is concerned with budgeting for outcomes and outputs as well as inputs;
Relies heavily for accountability on its transparency, based on the rapid generation and publication of sufficient accessible information, and on sufficient pressure from both inside and outside the state.

The budgetary system which prevailed in South Africa prior to 1994 reflected few, if any, of these principles. In the past, budgeting was a secret, highly centralised affair. Criteria for allocating public funds were never explicitly articulated, reflecting the glaring inequities in public spending. Fiscal aggregates were determined by the Department of Finance within a short-term (single year) framework. The budget allocations were determined by the Department of State Expenditure and the function committees. The latter were committees comprising departmental officials, with the responsibility of co-ordinating budget proposals for each area of government's functional expenditure (e.g. health, education, and defence). They received proposals for funding for all departments (national and provincial) engaged in a given function, and prioritised these for the budget. Such committees have recently been abandoned, at the end of the 1996/97 budget cycle.

The role of Parliament in reviewing the budget was a formality -- Parliament merely "rubber-stamped" the budget compiled by the executive. Budget documents were highly inaccessible. They reflected financial control over public funds spent, but did not expand on how these funds were spent or whether they had been spent effectively. Budgeting was concerned only with control over inputs into government delivery, and there were few links with broader planning processes.

Line managers administered budgets which they received, rather than managing the resources under their control to optimise outputs and performance. The lion's share of costs comprised wages and salaries of personnel, often as much as 70 -80% of the total. Such costs were effectively determined centrally, particularly through the Central Chamber of the Public Service Bargaining Council. Managers had little authority to hire and fire, because this function was also largely centralised -- initially in the Public Service Commission (formerly the Commission for Administration) and more recently in the DPSA. The responsibility for office accommodation and many capital expenditures fell under the Department of Public Works rather than individual line departments. Tendering and procurement were notoriously slow and cumbersome. And effective financial management systems were noticeable largely by the absence.

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5.3 The domestic and global context of budget reform

5.3.1 The Constitution

The contrast between pre-1994 realities in South Africa and current international best practice could hardly be more stark. However, the new Constitutional framework (both Interim and Final) has put into place a new set of principles and institutions that necessitate a move away from the former and in the direction of the latter. In particular, this framework commits government as a whole firmly to the principle of decentralisation, through the establishment of three distinctive but inter-related spheres of government: national, provincial and local governments. The Interim Constitution of 1993 devolved some authority over public resource allocation to sub-national governments. The final Constitution of 1996 affirmed the move towards fiscal decentralisation and strengthened in particular the role of local governments. The provisions of the Interim Constitution remain in force until 1 January 1998 when Chapter 13 of the Constitution (1996), which deals with inter-governmental fiscal relations comes into effect. Provincial powers and functions are either exclusive or concurrent with those of national government. Thus provinces do have some degree of autonomy, as we have seen in Chapters 2 and 3, though this is weighed up against the national interest. Nonetheless, this implies considerable decentralisation in the budgeting process.

A key feature of this framework is the principle of cooperative governance. This requires that the three spheres of government coordinate their actions and legislation, and exercise their powers in a manner which does not encroach on the geographic, functional or institutional integrity of government in another sphere. To enable provinces and local governments to exercise the powers devolved to them and provide services, they are constitutionally entitled to an equitable share of nationally-collected revenue. Section 227 of the 1996 Constitution states also that lower spheres of government may receive other allocations from national government revenue, either conditionally or unconditionally.

The 1996 Constitution also places considerable emphasis on the principles of accountability and transparency, and on the public participation necessary to realise these principles. Section 92(2) states that members of the Cabinet are accountable collectively and individually to Parliament for the exercise of their powers and the performance of their functions. Section 133 provides similarly for the accountability of members of the Executive Council of a province (EXCO). Sections 215 and 216 explicitly require transparency and accountability in the budgetary processes of all three spheres, and on both the revenue and expenditure sides. Section 216 requires the treasury to ensure expenditure control. Section 195 requires the public service to provide the public with timely, accessible and accurate information, so that public participation in policy-making processes is encouraged.

The Constitution vests the legislative authority of the respective spheres of government in the national parliament, the provincial legislatures, and the municipal councils. The budget, an appropriation bill, is a money bill, which only the Minister of Finance may introduce in the National Assembly. In the provinces, only the MEC for Finance may introduce a money bill in the legislature. In the past, Parliament had no power to amend the budget. However, the 1996 Constitution makes provision for Parliament to amend money bills, including the budget. This could strengthen the oversight role of Parliament including the monitoring and evaluation of policy implementation, particularly through the work of the Parliamentary committees. Equivalent provisions exist for the provinces.

To operationalise the system of inter-governmental relations, the Interim Constitution also established the Financial and Fiscal Commission (FFC) as an independent statutory body to make impartial recommendations to all relevant legislatures regarding the financial and fiscal requirements of all three spheres of government. It makes recommendations, inter alia, about how government revenue should be shared among the various spheres of government, financial allocations, taxation, borrowing, and the criteria used in determining these matters. In making its recommendations on the equitable division of resources among national, provincial and local governments, the FFC is obliged by section 214(2) of the 1996 Constitution to take a number of criteria into account. These including provision for the national debt, the obligations of all three spheres to provide services and meet their other obligations, their fiscal capacity to do so, economic disparities within and among provinces, and the desirability of stable and predictable allocations of revenue shares.

The FFC is an advisory body and its recommendations are therefore not legally binding. Greater clarity on its powers and the precise nature of its interface with other institutions is anticipated from the forthcoming FFC Bill and the Inter-Governmental Fiscal Relations Bill.

The role of the Auditor-General (AG) in ensuring the accountability of spending agencies is crucial. The Constitution specifies the existence, independence and impartiality of the Auditor-General. Among other things this requires giving the Auditor-General's office sufficient resources, guaranteeing its independence from interference, and providing political support for its role in upholding the principles of transparency and accountability. Section 188 of the 1996 Constitution requires the Auditor-General to "audit and report on the accounts, financial statements and financial management" of all state institutions or other recipients of public money. It also enables additional powers to be prescribed by national legislation, which could include monitoring the efficiency and effectiveness of public spending.

5.3.2 The Domestic Policy Environment

Since 1994, the Government has committed itself, through a series of policy documents and enabling legislation to the fundamental reconstruction of government structures, institutions and processes. Some of the key documents are reviewed briefly below. It should be noted, however, that the actual implementation of the policy recommendations contained in them has been somewhat uneven and inconsistent (as demonstrated elsewhere in the PRC's report).

5.3.2.1 The RDP White Paper

This White paper, published in September 1994, expressed the Government's view of the RDP "Base Document" formulated prior to the election. The RDP re-affirms the constitutional principles of transparency and accountability, while also committing government to greater efficiency and effectiveness in its activities. The RDP explicitly identifies the need for greater integration between strategic and operational planning and budgeting processes. It also emphasises the need for performance monitoring systems, as part of the accountability mechanism. Finally, the RDP emphasises the need for sustainable macroeconomic balances in the effort to transform the state and the society.

5.3.2.2 The White Paper on the Transformation of the Public Service (WPTPS)

Published in November 1995, and discussed extensively elsewhere in this report, the WPTPS identified eight key transformation priorities for the public service, including rationalisation and restructuring, institution building, representivity and affirmative action, and perhaps most importantly the transformation of service delivery.

A key component of the rationalisation and restructuring of the public service would be the creation over time of a leaner and more cost-effective service. This would involve, amongst other things, a reduction in consumption expenditure as a proportion of total government spending, and a corresponding reduction in the wage bill as a proportion of consumption expenditure (from its relatively high level of 60 per cent to a figure - in the region of 40% - that is more in line with countries at a similar stage of development). The rationale, as we saw in Chapter 3, was not merely to save money, but rather to release resources for productive investment in RDP-related initiatives.

In the Chapter on Institution Building and Management the WPTPS also strongly advocates the move towards the decentralisation of managerial responsibility, and increased accountability for results through the introduction of performance-related contracts for DGs. The White Paper emphasised that for such reforms to be effective there would also be a need for them to be accompanied by a corresponding increase in flexibility over financial and human resources control.

5.3.2.3 GEAR

In June 1996, the Cabinet adopted GEAR as an integrated policy package aimed at attaining a GDP growth rate of 6% per annum and 400 000 new jobs per annum by the year 2000. These targets are to be achieved through increases in investment levels in response to sustained macroeconomic stability, enhanced international competitiveness in a more open economy, and a re-configured relationship between the private and public sectors.

A number of the policy positions re-affirmed in GEAR have implications for budgetary processes. Macroeconomic stability rests on a tight fiscal and monetary stance to keep inflation under control. Under GEAR the Government commits itself to a fiscal deficit reduction programme, from 4.5% of GDP in 1996/97 to 3.0% by 1999/2000. In addition, a tax-to-GDP ratio of about 25% would be maintained over this period, thereby determining the total resource envelope available to government. GEAR also commits or re-commits government to increased efficiency in revenue collection and financial management, and to improved expenditure planning and control. The re-configuration of the relationship between the private and public sectors involves re-prioritising spending, to expand significantly the role of the private and non-governmental sectors in the provision of goods and services previously delivered by the public sector. This has obvious and important implications for budgetary allocative decisions and processes.

5.3.2.4 The Batho Pele White Paper on Transforming Public Service Delivery

Published in 1997, this White Paper identifies and suggests ways of operationalising eight key principles of improved service delivery -- consultation, service standards, access and entitlement, courtesy, information, openness and transparency, redress, and value for money.

In aiming to enhance public service delivery, the White Paper acknowledges the need for a fundamental management shift to a culture of public service or "people first" (hence the subtitle of the document, Batho Pele, which is the Sesotho term for people first), including assignment to individual line managers of the responsibility for delivering specified results for a given level of resources, matched with managerial authority for decisions about resource use. This requires the delegation of managerial responsibility and authority to the lowest possible level, as well as transparency about results achieved and resources consumed.

5.3.2.5 The Public Service Laws Amendment Act

This important act, which is covered in greater detail in Chapters 2 and 3 of this report, was promulgated by Parliament in 1997 and gives legislative backing to move towards greater delegation and decentralisation. One of the main aims of the act is to remove the rigidities imposed by the 1994 Public Service Act, and the associated regulations and staff code, and by so doing to pave the way for the introduction of a much more decentralised management system, in which the responsibility and capacity to make decisions is devolved to the most appropriate levels of management. Although focusing in the main on the decentralisation of personnel matters, the act clearly has major implications for budgetary and financial reform.

For unless there is a corresponding move to decentralise budgetary and financial management, public service managers will clearly find it difficult if not impossible to exercise their newly delegated powers in the creative and effective way envisaged in the act and other associated policy documents.

5.3.2.6 Public Works Towards the 21st Century

This document advocates a gradual devolution of responsibilities from the Public Works Department to line departments. From 1998/99, the annual capital and current expenditure budgets of national departments will include provision for rental of offices and other accommodation, as well as for the delivery of services such as maintenance. For the subsequent three years, line departments will be obliged to purchase property and facilities management services from Public Works. This is to allow the Public Works Department to reposition itself on a more competitive basis with private sector providers.

5.3.2.7 The Green Paper on Procurement Policy

This 1997 document addresses a controversial issue. Current tender regulations and Tender Board procedures are regarded as a major impediment to prompt and effective service delivery by many provincial and national departments, as expressed in their presentations to the PRC. Departments see the procedures as far too bureaucratic and not transparent enough. The Green Paper seeks to address this issue, by permitting greater decentralisation and flexibility, whilst at the same time guarding against possible abuses of this new-found flexibility by proposing the introduction of an effective control and monitoring system to ensure that departments and provincial administrations comply with nationally laid-down legislation, norms and standards.

5.3.3 The Global Context

The emergence of a democratic order in South Africa and the magnitude of the subsequent political, constitutional and administrative changes are, in many respects, unique. Nevertheless, many of the challenges faced in transforming the public sector in this country, especially within the area of financial planning and budgeting, are mirrored in other countries. Globally, from Malaysia to the United Kingdom, Sweden to New Zealand, there is a growing trend toward budget reform as part of a broader thrust towards improving public service delivery. The rich experience overseas in budgetary reform can therefore provide a valuable resource to draw on in crafting a system which is appropriate to the South African context, with the obvious proviso that differences in constitutional structure, institutional framework, political culture and available technology and skills render attempts to slavishly replicate systems devised elsewhere highly inappropriate.

5.3.3.1 The Focus of Budgetary Reform

Below are some of the common challenges and problems which have prompted reforms in a number of countries studied by the Commission (including the Australia, Malaysia, New Zealand and the UK).

In many governments the processes of strategic planning and prioritisation, financial planning and resource allocation, and performance management have tended to be discrete processes with very little integration and synergy. This has resulted in policies which were unconnected with budgetary provision, and thus prone to implementation failure.
An agreed set of priorities in the form of a clear, integrated statement of overall public sector policy goals and outcomes have often been lacking.
Horizontal fiscal coordination across ministries and departments has tended to be poor.
The budget and financial management processes have frequently failed to generate adequate information to assist political decision-making (especially in terms of the future fiscal implications of current and new policies).
There has often been a missing link between the national vision and the annual departmental priority setting and budgeting processes.
Frequently there has been little or no link between budgeting and the macroeconomic framework, together with an absence of detailed estimates of revenues over the medium term.
The determination of staffing levels has often been divorced from annual budget formulation.
The lack of effective budgetary guidance by treasuries to spending agencies has often been accompanied by poor budgetary preparation by spending agencies.
Budget implementation has frequently been characterised by rigidity in the release of funds; excessive reliance on central controls; and the absence of reliable cost, output and efficiency data.
Financial information systems have frequently failed to generate timely reports. Reports have tended to account for how money was spent, not about whether value-for-money was obtained.
The role of the budget office or treasury has largely been to specify items of expenditure (personnel costs, supplies etc) and monitor compliance with regulations, rather than to strategically plan and monitor the achievement of outputs and outcomes.
The primary focus has therefore been on control and adherence to regulations rather than the promotion of accountability and the achievement of results.
Centralised financial control seems to have absolved departmental managers from accountability for performance (managers in effect "administered" their budgets, they did not "manage" them).

5.3.3.2 Themes Underpinning Reform Initiatives

The above list of challenges and problems is not meant to be exhaustive, but merely to give some indication of the factors which have stimulated reforms in the fiscal, allocative and technical aspects of the budgetary and financial management processes. The precise nature of the reforms has naturally varied from country to country, but a number of broad common themes have begun to emerge. These include:

The introduction of effective aggregate expenditure control frameworks to promote greater fiscal discipline and macro-economic stability;
The introduction of right-sizing measures to reduce consumption spending, release resources for productive investment, and in particular to achieve a more optimal allocation of resources (both human and financial) in line with government priorities;
Contracting-out of services to the private or community sectors (sometimes on a partnership basis) to promote greater efficiency, effectiveness and competition in service delivery;
The introduction of medium-term expenditure frameworks to promote improved planning and greater stability and continuity in the budgetary process, and to overcome some of the well-known problems associated with annual incremental budgeting;
The development of systems and mechanisms aimed at forging closer links between strategic planning, budgeting, financial management and performance management systems;
The introduction of tighter political (Cabinet, Ministerial) control over vision-building, priority setting, and the establishment of central goals, norms and standards;
The corresponding decentralisation of greater managerial autonomy at the operational level, to promote flexibility and responsiveness to local needs;
The introduction of incentives and controls (such as performance-related contracts) to ensure that greater managerial responsibility and autonomy is matched by accountability for the achievement of centrally-established goals and priorities;
The establishment of improved forms of coordination between and within departments;
The move towards an output, outcomes, programmes-based and results-oriented approach to budgeting, rather than the traditional input-based approach;
The introduction of systems of programme management and budgeting to institutionalise these new outcomes and results-based approaches;
The introduction of incentive systems to reward and promote improved performance, productivity and probity amongst civil servants, as well as more effective monitoring and disciplinary systems to discourage corruption and waste;
The increasing use of computerised information systems as a key component of budgeting and financial management;
The introduction of skills development programmes to upgrade the capacity of financial managers and staff, as well as to make non-finance staff more knowledgeable and aware of their financial responsibilities;
The promotion of greater transparency and accountability to the public in budgetary matters;
The introduction of improved systems for financial monitoring and review.

The experience of countries like Australia, Malaysia, New Zealand and the UK has shown that budget reform, buttressed by wider public sector reforms can significantly improve service delivery and restore government's credibility among domestic citizens and overseas investors. In fact, in an increasingly integrated global economy, good fiscal management itself constitutes a competitive advantage.

While the potential returns to budget reform are substantial, so too are the consequences of reform failure. Before embarking on a reform strategy, the factors which could potentially undermine reform need to be managed and these risks minimised. For instance, there may not be the political will to sustain reform, especially if hard decisions need to be confronted. On the other hand, the facts of democracy have meant that in countries like New Zealand, multi-year strategic plans to introduce well-timed, carefully designed economic reforms have been spasmodically jeopardised by surges of political unpopularity, or failures of nerve on the part of elected leaders and their political parties. Whilst there are no golden rules to guide the reform process, one important lesson seems to be that the prioritisation, pacing and sequencing of reform must be feasible, credible and linked to systematic plans to create the necessary capacity the new systems would require.

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5.4 Developments in budgeting and financial management

The budget process in South Africa has undergone substantial re-organisation since 1994. This was necessary in light of the constitutional shift towards decentralisation and devolved powers to sub-national governments. The challenge of transforming budgeting practices to conform with the unfolding inter-governmental fiscal framework was compounded by the tight time frames in which these fiscal structures had to be established, and key enabling legislation put in place. During the transition period, government operations had to continue. Instead of starting from a blank slate, therefore, elements of the new system, which is taking shape, were superimposed on existing institutions and structures. Furthermore, the evolution toward a decentralised approach seems to be unfolding without a systematic transition plan.

This section reviews the changes which have been introduced, discussing in turn government committees and structures, inter-governmental fiscal relations, the budget process, and other measures being put in place, including the Medium Term Expenditure Framework (MTEF).

5.4.1 Government Committees and Structures

A large number of different bodies play a role in the budget process. The evolving nature and functions of some of the most important ones are summarised below.

5.4.1.1 The Cabinet

The Cabinet operates through three standing committees: on Economic Affairs, Social and Administrative Affairs, and Security and Intelligence Affairs. These committees make recommendations to the full Cabinet. All of them are attended by the Deputy President. Each standing cabinet committee is supported by a secretariat, as well as a parallel technical committee consisting of heads of departments and other senior departmental officials. Filtering down Cabinet decisions to departments is the responsibility of the individual ministers.

In addition, a number of ad hoc inter-ministerial committees have been established for particular purposes. Two of these deal with budgetary matters. The first is the Ministers Committee on the Budget (MinComBud), chaired by the Minster of Finance and consists of the Deputy Minister of Finance, and the Ministers of Public Service and Administration, Trade and Industry, Arts, Culture, Science and Technology, Health and Education. This committee identifies broad strategic priorities and reviews broad indicative allocations, for cabinet approval. The finer details are reviewed by the MTEF Committee (see below).

The second Cabinet committee dealing with the budget is the Treasury Committee, which is also chaired by the Minister of Finance, and includes the Deputy President, the Ministers of Home Affairs, Labour, and Trade and Industry, the Deputy Minister of Finance and the DGs of Finance and of State Expenditure. One of the most important aspects of its brief is to evaluate all requests for additional funds and to determine whether such additional expenditure is unforeseen and affordable. The committee may recommend an investigation into the financial/management position in a spending agency before supporting additional expenditure.

5.4.1.2 The Departments of Finance and State Expenditure

Aside from the Cabinet, the central structures within the National Government are of course the Departments of Finance (DoF) and State Expenditure (DoSE). The former department is primarily responsible for identifying affordable fiscal aggregates within the Government's macro-economic strategy; initial estimates of revenue; and developing a Medium Term Expenditure Framework (MTEF). The DoSE is responsible for evaluating budget planning submissions by spending agencies, and negotiating with the latter about savings and resource allocations. It prepares recommended allocations for consideration Cabinet and its committees.

5.4.1.3 The MTEF Committee

The MTEF Committee is essentially a technical committee consisting of the Minister and Deputy Minister of Finance, and the DGs and officials of the DoF and DoSE. This committee reviews the recommendations of the DoSE, and submits its own recommendations to Cabinet. The accounting officer (until recently the DG) and financial manager of each spending agency is invited to attend when the departmental inputs and the recommendations of the Department of State Expenditure are considered.

5.4.1.4 Intra-Governmental Co-ordinating Structures

A new unit, the Coordination and Implementation Unit, is being established in the Office of the Deputy President. Although planning and policy development are the brief of line ministries, this unit will coordinate policy development and monitor implementation. It will complement the support role of the Cabinet Secretariat, by catalysing and facilitating inter-ministerial and inter-governmental coordination. It will also necessarily work closely with the Departments of Finance and State Expenditure, to ensure adequate linkages between policy and strategic planning, on one hand, and budgetary and financial planning on the other.

5.4.1.5 Inter-Governmental Co-ordinating Structures

There are a range of committees designed to facilitate coordination between the National Government and provincial governments. The Budget Council (Finance MINMEC) comprises the Minister and Deputy Minister of Finance, the 9 provincial MECs for Finance, DGs and heads of finance departments, and the FFC as an observer. It enables the exchange of information and coordination of legislation. The Council recommends to Cabinet the vertical and horizontal division of resources after taking into account national priorities and FFC proposals. The Technical Committee on Finance (TCF) supports the Budget Council in its work.

The Inter-Governmental Forum (IGF) consists of all national ministers and provincial premiers, with the President and Deputy-President ex officio. As noted in Chapters 2 and 3, it meets quarterly to promote inter-governmental consultation and decision making on important matters relating to inter-governmental cooperation and coordination, including financial matters.

5.4.1.6 Legislative Bodies

Turning to the legislative arm of government, the National Parliament includes both a Portfolio Committee on Finance in the National Assembly and a Select Standing Committee in the National Council of Provinces. Following the first reading of the budget in parliament, the Appropriation Bill (which gives departments the legal power to spend the allocations made to them), and any proposed changes in tax legislation are submitted to the Portfolio Committee on Finance for consideration. The Select Committee has tended to focus on fiscal issues at provincial and local government level.

Provincial legislatures also have standing committees on finance and on public accounts, which play an oversight role over provincial budgets. Since their election in 1994, provincial legislatures have been asked to approve provincial budgets, which were simply the totals of predetermined allocations of the now disbanded function committees. Approving the provincial budget was thus a mere formality, rather than an exercise in accountability. Since provinces will in future have greater discretion to allocate revenues including grants from national level, provincial legislatures will have more scope to articulate fiscal policy and to oversee the provincial executive, while also being more accountable to the electorate.

5.4.1.7 Other Bodies

A number of other bodies also play a role in the budgetary process. The FFC and the Auditor-General have been discussed in Section 5.3.1 above. Another body which plays a role is the NEDLAC, which provides a forum for dialogue and negotiation amongst government, business, labour and community organisations. Although NEDLAC constituencies have no capacity to veto or oversee budgetary allocations, these are presented to them for comment. This is an important step in the consensus-building process which as noted earlier is critical for allocative efficiency in budgeting.

5.4.2 Inter-Governmental Fiscal Relations

As noted earlier, the 1997/98 budget was the first budget prepared under the authority of the Interim Constitution, following the disbanding of the function committees after the 1996/97 cycle. The recommendations of the FFC on inter-governmental fiscal relations thus became an important element of the budgetary process, although such recoomendations currently only have the force of advice.

In seeking to give substance to inter-governmental fiscal relations, the FFC faces two major dilemmas. Firstly, there is a substantial mismatch between the revenues which provinces could potentially raise and their increased spending obligations under the Constitution, since almost all revenue is collected nationally. Secondly, there are significant disparities amongst provinces in terms of income and required public expenditure per capita. To overcome these imbalances, the FFC has proposed a system of inter-governmental grants. The pool of available revenue would be split between national and provincial spheres on the basis of assigned expenditure responsibilities. After this vertical split, the aggregate provincial allocation would be split horizontally among the nine provinces.

A formula has been devised by the FFC to implement the vertical and horizontal splits. This is intended to minimise subjective and undue political manipulation of the shares of available revenue for any particular year. The goals of the formula are to achieve effective and efficient resource allocation; fiscal equity in the provision of services and the raising of provincial taxes; and the development of fiscally sound and democratically responsive provincial governments. The FFC has argued that the formula should be applied for a three year period before being revised, to enable provinces to carry out effective medium term planning. The formula is linked mainly to population (with additional weight to rural populations to reflect differential poverty levels).

5.4.2.1 The Vertical Split

The vertical split between national and provincial governments takes account of the need to service the national debt, as well as adjustments to conditions of service (as agreed in the central bargaining chamber). These amounts are "top-sliced" from total revenue before the pool is split vertically. This split will be determined annually by the Budget Council, with due regard to the needs of provincial governments with respect to the delivery of services such as health, education and welfare. The FFC has proposed that the ratio should be shifted in favour of the provinces by 0.5% per annum over the course of the five year phasing-in period. It has also recommended that provinces should have the right to levy provincial taxes to supplement funding received from the National Government (including a proposed provincial surcharge on personal income tax).

5.4.2.2 The Horizontal Split

The horizontal split is based on the following provincial grants formula:

A Basic Grant to enable provinces to establish and maintain the institutions necessary for the fulfilment of their constitutional obligations according to their own priorities. The basic grant is awarded to provinces on a weighted capitation basis (rural residents of a province are weighted 0.25% more than their urban counterparts).
A Minimum National Standards Grant to enable the provinces specifically to provide primary and secondary education and primary and district health-care.
A Spill-over Grant to provide for the financing of those services which have inter-provincial spill-over effects.
A Fiscal Capacity Equalisation Grant to ensure that provincial functions are financed from an equitable provincial taxing capacity and to encourage accountability and democratic institutions associated with provincial legislatures.
An Institutional Grant to provide funds for each province to finance the core of its legislature.

Infrastructural backlogs are to be addressed separately, through ad hoc grants from national government. For the 1997/98 fiscal year, provincial discretion over spending was increased as funds were transferred to provinces as lump sums. The 1997/98 provincial budgets reflect increased input of the provincial legislatures. Minimum standards legislation has not yet been enacted but, in future, national norms will be specified, and provinces will have discretion over spending above these norms.

Whereas the Interim Constitution and the 1997/98 budget process were concerned only with national/provincial revenue-sharing, the final Constitution requires that local government revenues also be allocated out of the national revenue pool. The Inter-Governmental Fiscal Relations Bill (IFR) addresses this issue. Once enacted, it will require the FFC to submit to the Minister of Finance, at least 10 months before the start of the financial year, recommendations regarding this three-way vertical split, the horizontal split amongst provinces, and ad hoc grants from national government to the other two levels. The Minister of Finance will make the decision after consulting the Budget Council, the FFC and the Local Government Budget Forum, on which the South African Local Government Association (SALGA) is represented. The IFR Bill also contains proposals for enhancing accountability for allocative efficiency in the division of revenue amongst spheres of government is to be enhanced. The Bill requires the Minister of Finance to table a Revenue Sharing Bill each year together with the Budget in the National Assembly. This revenue bill must spell out the revenue division that has been made, and justify it in terms of the constitutional requirements for equitable revenue shares, and the FFC's recommendations.

5.4.3 The Budget Process

While the 1997/98 budget was prepared under the auspices of the Interim Constitution, the 1998/99 budget cycle is the first to reflect fully the impact of the new constitutional dispensation. As such it may be regarded as a precursor of the future system. A flow chart presented below details the sequence in which major decisions in the national and provincial budget processes are taken, and the associated time frames. The aim of the diagram is simply to provide an overview of the complex inter-governmental and inter-departmental interactions which result in national and provincial budgetary allocations. It will be evident from the diagram that budgeting has become more of a "bottom-up"" process in contrast to the previous regime's centralised and "top-down"" approach.

Eight stages of the budget process can be identified. These are outlined briefly below. Several key features are worth emphasising. The first is the iterative nature of the process which involves at least five submissions to the national Cabinet or one of its committees, of increasingly more detailed and firmer allocations. This reflects extensive political involvement in the allocative process. The second point concerns the somewhat limited opportunities for popular consultation in order to assess needs and demand. Negotiation over allocation appears to take place almost exclusively within the executive arm of government, between politicians and officials in the national and provincial levels. Public documentation appears for the first time in Stage Six, in the form of the Medium Term Budget Policy Statement. Nonetheless, and thirdly, the fact that this document was indeed published (on 2 December 1997) represents a major advance in transparency for budgetary procedures in South Africa.

Stage One: The Fiscal Framework

Between January and March the medium-term fiscal framework is developed by the Department of Finance, using its macroeconomic model to project GDP over three years. The GEAR strategy provides targets for revenue and borrowing as shares of GDP, enabling the maximum expenditure figures to be calculated. Based on this scenario, the Cabinet sets objectives and broad priorities.

Stage Two: National and Provincial Spending Agencies Submit Three-Year Budget Inputs

Towards the end of May, national departments submit their three year budget submissions to the Department of State Expenditure. Budget submissions are approved by the appropriate Minister before submission. Such submissions are required to reflect two scenarios. The first is the costing from base zero of all ongoing and new activities. This includes an evaluation in terms of economy, efficiency and effectiveness. Spending agencies are now also required to describe line function activities in terms of measurable quantity indicators (such as accuracy, completeness, accessibility compliance with legal standards, timeliness, and the satisfaction of customer needs).

The second scenario assumes no expenditure growth in nominal terms for 1998/99, and maintains that level in real terms for the subsequent two years. The implications of this latter option are spelled out, indicating in particular activities to be scaled down. New activities are motivated in terms of the mission of the spending agency, and requests for capital funds submitted in consultation with the Department of Public Works.

From May to June the DoF and DoSE then evaluate inputs from line ministries and other spending agencies, in consultation with the agencies, and in the light of the indicative fiscal aggregates and national priorities set in Stage One. The central departments then consolidate the revised submissions into a draft national MTEF presented to Cabinet early in July.

Provincial line departments submit their budget planning inputs to their own treasuries, making use of provincial guidelines on planning and budgeting. The provincial treasuries evaluate the inputs and generate initial draft provincial MTEFs for the provincial Executive Councils (EXCOs). These are forwarded to the national DoF in mid-July.

Stage Three: Revenue Sharing

This stage overlaps Stage Two. In May the Budget Council recommends vertical and horizontal divisions of resources. After considering the recommendations of the FFC and the Budget Council, the Minister of Finance decides on the proportions in which nationally collected revenue is shared for the 1998/99 and the two subsequent fiscal years. First the total revenue pool is "top-sliced" (debt-servicing currently running at approximately R40 billion being the major component). Provision is also made for a contingency fund of R5 billion in 1998/99, increasing to R10 billion in 2000/01. This is available for allocation by Cabinet just before Budget Day, to allow for flexibility in altering the vertical split. After the top-slice the remaining revenue pool is split vertically (the current provincial-national split being in the ratio 53:46), and then divided horizontally between the provinces. These indicative allocations, once they are known, drive the MTEF budget input formulation process. But currently it remains unclear exactly how the Budget Council reaches its decisions.

Stage Four: Consolidating National and Provincial MTEFs

From July to September the national and provincial MTEFs are consolidated to produce an MTEF for the country as a whole. National spending agencies and provinces receive their indicative allocations. Programme officers of the DoSE then negotiate with the national spending agencies to cut their budget inputs in line with the indicative allocations. There do not appear as yet to be explicit and transparent criteria for suggesting these cuts. The MTEF Committee reconciles the revised submissions with the draft MTEF. As noted, the accounting officer (DG) and financial manager of the spending agency under review attend the MTEF Committee's discussion of their budget inputs and DoSE recommendations.

In early September MinComBud signals priorities for approval by Cabinet in mid-September. MTEF sectoral work teams from national and provincial departments and treasuries develop expenditure models of the five major spending areas: defence, criminal justice system, education, health and welfare. These models provide an analysis of policy choices and formulate proposals for conditional grants. The MTEF Committee presents its recommendations to the Minister of Finance, MinComBud and the Budget Council. MinComBud reviews allocations for national and provincial departments and the Cabinet approves the draft national MTEF in October or November.

Stage Five: Budget Council Recommendations on Revenue Sharing Adjustments

The draft consolidated MTEF is submitted to the Budget Council, which recommends allocations to national departments and provinces to the Extended Cabinet (which combines national Cabinet members and provincial premiers).

Stage Six: Extended Cabinet Discussion of Final Indicative Allocations

The final indicative allocations for all spending agencies are approved by the extended Cabinet in November. A menu of options will be discussed in determining the trade-offs required to close the gap in balancing the budget within available resources. The draft national MTEF is published for parliamentary and public debate.

Stage Seven: Finalising National and Provincial MTEFs

National spending agencies and provinces receive their final allocations and adjust their budgets accordingly. The MTEFs of the spheres of government are finalised, considered by the Budget Council, and given final approval by the Cabinet in February.

Stage Eight: Compiling Budget Documents and Tabling National and Provincial Budgets

Final documents are submitted to the Department of State Expenditure by national departments (mid-January) and provinces (mid-February). The Minister of Finance makes his Budget Speech in mid-March, and tables the Printed Estimates of Expenditure (known as the "White Book"). Provincial budgets are tabled in the nine provincial legislatures by the MECs for Finance shortly thereafter.

5.4.4 Other Measures

A number of pieces of legislation have been placed before Parliament, or are due to be shortly. Once enacted, they will have a significant impact on budgetary processes. These include:

The Financial and Fiscal Commission Bill, which establishes the FFC as an independent, impartial consultative body;
The Public Finance Control Bill, which is expected to establish a national treasury with uniform norms and standards; to restructure budget formats especially for capital budgets; to re-examine the roles of accounting officers, MECs for Finance and provincial treasuries; and to examine sanctions on unauthorised expenditure;
The Provincial and Municipal Taxation Bill;
The Municipal Borrowing Powers Bill;
The Money Bills Amendment Procedure Bill, which will enable Parliament to amend money bills, including the budget, which it previously could only accept or reject (Parliament will not be allowed to alter tax rates, and will only be able to suggest revisions of the allocation within a particular vote, rather than across votes).

A draft Budget Reform White Paper is also expected to be completed very soon. This will address central objectives including fiscal discipline, strategic prioritisation across programmes and projects, efficiency in the use of resources and the translation of policy into delivery. Themes underpinning the White Paper are likely to include decentralisation, incentives and accountability, transparency and the contestability of fiscal structures and processes.

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5.5 Issues and challenges for further reform

The previous section reflects the substantial progress already made in South Africa towards budgetary and financial reform, and indicates that further legislative and policy changes are in the pipe-line to build upon and consolidate the achievements that have been made. Whilst the Commission acknowledges and applauds such progress, its investigations have revealed a number of outstanding issues and challenges that still need to be addressed. These relate in particular to:

The nature, costing and accountability of the budgeting system;
Unfunded mandates;
Structures and processes;
Financial management and administration;
Procurement policy;
The Role of Information Management, Systems and Technology (IMST);
Human resources development and capacity building;

These related issues and challenges will be described and discussed in the present section. Recommendations for addressing them will be made in the next section of the report.

5.5.1 The Nature of the Budgeting System

5.5.1.1 Programme Budgeting and Output-Based Performance

The budgeting system historically used in South Africa has been incremental budgeting. As the name suggests, the focus here is on allocating additional revenues which become available, with little examination of existing spending, in regard to either allocative or technical efficiency. The implicit presumption is that existing activities are optimal. Reforms to date have not fundamentally affected the budgeting system, which remains essentially an incremental one.

At the opposite extreme to incremental budgeting is zero-based budgeting, a system where each item of expenditure is newly justified each year. In other words, each year, all programmes must be shown still to be relevant to government priorities, and to be effective and efficient. Whereas incremental budgeting overemphasises continuity, zero-based budgeting underemphasises it, assuming constant flux throughout government. In addition, the process of zero-based budgeting is very costly in terms of staff time.

As mentioned in the previous section, the 1998/99 budget will be based on a combination of incremental and zero-based scenarios. Combining as it does the defects as well as advantages of the two systems, this approach is likely to be problematic. There is, however, another approach which, in the view of the Commission, would be preferable to either incremental or zero-based budgeting (or the current combined scenario), and would add-value to the new MTEF approach to budgeting outlined in the previous section. This is performance-based programme budgeting (PBPB), variations of which are becoming increasingly popular in many of the countries studied by the Commission.

PBPB provides a framework which integrates policy objectives, implementation strategy, required inputs, appropriation of funds, defined outputs and performance measures. Since programmes are linked to a specific policy objectives, they can be ranked in terms of their priority. Programme budgeting facilitates efforts to achieve allocative efficiency, because it focuses costing and financial planning on outputs and outcomes, rather than simply on inputs undifferentiated according to the service they help deliver.

As goals and priorities change over time, programmes can be expanded or phased out, and new programmes introduced. A systematic approach to this aspect is the A-B-X budget. This divides spending allocations into three categories. The "A-base is the base spending, the cost estimate of existing programmes. This includes cost escalations external to the programme itself, such as inflation and improved conditions of service for public sector employees. The second category, the "B-base," is the sum of proposed new spending initiatives, either the expansion of existing programmes or new programmes. Included here are cost increases internal to the programme, such as higher minimum standards or extended coverage within the population. The last category is the "X-base," the sum of proposed spending reductions resulting from programme phase-downs and cancellations, and from increased efficiencies, for example resulting from programme re-design.

The advantage of the A-B-X budget system is that it differentiates between existing programmes and options for change, and therefore focuses attention on the key allocation decisions that must be made to fund the priorities of government within the limits of the fiscal framework's expenditure target. Savings or expenditure reductions within one department need not be trapped within that department, but can be re-allocated across the entire government. Similarly, proposals for new or expanding programmes can be looked at together, across departments and provinces, which will facilitate the assessment of their overall political and fiscal impact, as well as their priority ranking.

Naturally, a balance will need to be found in practice between encouraging departments to achieve marginal efficiency gains which can be reallocated within their mandate (otherwise the incentive to improve efficiency will be lost) and the principle of reallocation across government as a whole. Generally, only economy and efficiency measures that are substantial in size and political impact will find their way into the expenditure reduction component of the draft budget. Departments should retain any residual efficiency savings they to address specific priorities, as an incentive to further economize.

The A-B-X system also underlines the need, within programme budgeting systems, to focus control and evaluation processes on performance measures of outputs and outcomes, rather than on inputs alone. Managers have little incentive to increase technical efficiency within systems which measure only inputs, since greater efficiency means a loss of resources under their control, as savings are re-allocated across departments. Focussing on outcomes and outputs will serve in contrast to encourage efficiency gains.

In recommending the move towards a PBPB system, the Commision is aware that programme budgeting is not a novel or unproblematic concept. Probably the most ambitious attempt at implementing it was the Program Planning and Budgeting Systems initiative in the USA in 1965. However, until recent reform experiences, programme budgeting largely failed to deliver the goods. The principle reason for failure was that the preconditions for success (such as clear objectives, a high level of political support, support from the bureaucracy, and the effective integration of planning and budgeting) were simply not put in place. Such preconditions will clearly need to be established if an effective PBPB system is to be introduced.

5.5.1.2 Costing and Accounting Systems

To enable a greater focus on output data, an accounting system needs to be developed that organises financial data by programme activity, so that all input costs associated with a particular programme can be summed. It is also essential to develop output measures that specify the level or quantity of service associated with existing programmes, which can then be used for reporting and evaluation purposes.

There are two main methods of costing for financial planning. Resource-based costing is commonly used in the current system of financial planning in the South African Government sector. All personnel, equipment, buildings and facilities that are currently at the disposal of the department are budgeted for in cost projections, whether they are actually needed for current service delivery or not. Furthermore, expenses are categorised in such a way that it is not automatically obvious how much different services cost. All administration costs are lumped together. So too are a vast number of support services. Economic costing or pricing of the various services is thus impossible.

Activity-based costing, on the other hand, approaches costing by identifying the inputs required for each activity or programme. The cost of overheads common to all or several activities are apportioned on the basis of agreed and transparent criteria. Within the proposed performance-based programme approach to budgeting, activity-based costing is clearly the more compatible method.

The are also two main methods of accounting -- cash accounting and accrual accounting.

In South Africa, the general government uses cash accounting. This system of financial accounting recognises only cash inflows and cash outflows. Within this system there are cash books but no balance sheets because there are no assets or liabilities in the books other than cash balances. Sales are only recognised when cash is received (so there are no debtors); purchases are only recognised when cash is paid (so there are no creditors). There are no stock adjustments because the accounts are not concerned with registering usage, only with the fact that cash has been paid for purchases (so there is no closing stock figure). There are no fixed assets, for the same reason. Cash accounting systems have a number of major disadvantages. In particular they provide little or no incentive for the managers to monitor asset utilisation, maintenance, option appraisal or opportunity cost analysis.

Because of this many countries have moved or are moving towards systems of accrual accounting. These recognise revenue and expenses as they are earned and incurred, not as money is received or paid. Operationally, this means that revenue is taken to mean that invoices have been issued; costs are incurred when services are received. Revenue and costs are therefore recognised one step earlier than under cash accounting. The most important advantage of accrual accounting technique is that it encourages sound resource utilisation, by forcing managers to be concerned with the efficient utilisation of public assets.

Another advantage of accrual accounting is that it generate more comprehensive financial and performance management information. The information provided by the cash accounting method is incomplete, since it does not report the value of stocks of non-cash assets, liabilities (which may involve cash flows in future periods) or the cost of providing the service (important for assessing efficiency). In cash accounting capital expenditure (i.e. for an asset that lasts for more than one year) is recorded as an operating cost in the year in which the asset is acquired or built. In accrual accounting the cost is spread over the useful life of the asset as an annual depreciation charge. This facilitates true costing of outputs and performance measurement.

The skills complement required to implement an accrual system is substantial. The potential benefits will therefore need to be weighed up against the costs associated with implementing this form accounting system, before making a choice of which system is most appropriate.

5.5.1.3 Managerial Responsibility and Accountability

The continued predominance of incremental budgeting, as well as the ambivalent engagement with the MTEF in its first year of application, suggest that the orientation towards programmes and outcomes-based performance measures is still very limited within the line departments. This also reflects limited progress in decentralising managerial authority over inputs and service delivery. What is needed here are more powerful incentives to line managers to exercise responsibility and ensure accountability for outputs and outcomes (in line with national priorities, norms and standards), matched by increased flexibility in regulations governing the employment of staff and the procurement of inputs.

An important step in creating new incentives is the linking of senior management's contracts to performance. This has also begun to happen, but requires clear formulation of performance measures (of outputs) and performance indicators (of outcomes) and other evaluation criteria, as well as effective ministerial and parliamentary involvement in monitoring.

5.5.1.4 Broadening Participation in the Budgeting Process

The transparent disclosure of public spending and service delivery is a powerful overall control mechanism in the new system of budgeting proposed by the Commission, particularly in ensuring the accountability of the operational aspects of the budget. As noted in Section 5.4.3 above, while recent reforms in the budget process have resulted in a more transparent and "bottom-up" approach, opportunities for popular consultation and participation still remain quite limited. Up to stage six in the process, when the Medium Term Budget Policy Statement is published by the Minister of Finance in December, negotiations over allocations appear to take place almost exclusively within the executive arm of government, between politicians and officials at the national and provincial levels. This affords little time for effective consultation and involvement by civil society groups before the MTEF is finalised by the extended Cabinet in January.

If the budget process is to become more results and needs oriented, the Commission believes that more effective opportunities (and associated structures) for popular involvement must be built into the earlier stages of the process. These would include public hearings by the relevant national and provincial parliamentary financial committees. At the same time, budgetary information will also need to be expressed in a more accessible, timely and user-friendly form.

5.5.1.5 Monitoring, Evaluation and Review

Effective mechanisms for monitoring, evaluation and review will are vital in the budgeting and financial management processes, particularly in enabling government to identify and introduce new ways of reallocating resources towards the priorities it has established, as well as improving the efficiency and effectiveness of existing programmes of service delivery. This will especially be the case if the Government moves towards the kind of performance budgeting system advocated in this report. Regular programme review is central to the concept of performance budgeting, in which quantifiable measures and indicators are used to assess the efficiency and effectiveness of programme outputs and outcomes.

From the Commission's own investigations and other evidence (including the reports of the Auditor General and the DPSA's Provincial Review Report), it seems clear that current systems of monitoring and review are will need to be significantly improved if they are to serve these important functions.

Such improved systems will need to operate in an integrated and coordinated fashion at three main levels:

The operational or departmental level, to enable departments to track and evaluate programme outputs and outcomes and to feed this information into an effective and on-going process of strategic planning, budgeting and review.
The strategic management level within national and provincial governments -- to facilitate the monitoring and review of the broader impact of government programmes as a whole; to evaluate the extent to which individual departments have established effective systems of operational review; to assist departments in doing so where this is not the case; and to ensure effective coordination in the monitoring and review processes (essential given the inter-departmental implications of many service delivery programmes).
The political level -- to enable ministers, MECs, the Cabinet, EXCOs, the National Parliament and provincial legislatures to play a more proactive role in the monitoring and review processes.

In devising and implementing such systems, the Commission believes that it will be particularly important:

To ensure effective linkages with other public service monitoring and review structures (particularly those proposed in Chapters 2 and 3 of this report);
To ensure the involvement and participation of service users and civil society organisations in the above processes, especially though not exclusively at the operational level;
To upgrade existing information systems, particularly IT systems, to increase the accessibility and reliability of information, as well as to improve communication between and within departments, and between different spheres of government;
To upgrade the skills and capacity of staff.

The issues of IT and staff development will be explored in greater detail later in this section.

5.5.2 Unfunded Mandates

Unfunded mandates are new or additional spending obligations arising from policy decisions when the source of funding for the additional cost has not been made explicit. There are three main types of unfunded mandates:

The adoption of enhanced norms and standards to provide more equitable and accessible delivery of basic services, without having identified the cost implications or new funding sources;
The transfer of programme responsibilities from national to provincial governments without an associated transfer of fiscal resources;
The assumption of new input costs, for example improved conditions of service, without having identified new sources of funding.

The issue of unfunded mandates is particularly important in relation to policy documents such as White Papers. When White Papers propose specific programmes and policies, the fiscal implications should be made explicit in the document itself. A White Paper that sets out new programmes but excludes costs is tantamount to an unfunded mandate, by reason of the public expectations it arouses. As such, the cost implications should be treated as any other new initiative, as the policy proposal moves through the process of approval by Cabinet. Very often in the past, this has not been the case.

In a written response to questions from the PRC, the FFC acknowledged that unfunded mandates were causing major problems, particularly for the provinces. One example is the issue of salaries and improvements in conditions of service, which has proved, in the FFC's own words, a "nightmare" for the provinces, who have to meet these salary obligations, whereas the bargaining chamber sits at the central level. The same applies to retrenchment packages and social welfare grants.

The A-B-X budgeting system provides a particularly simple approach to dealing with unfunded mandates. Where costs associated with new mandates have been explicitly identified and approved by the national cabinet or provincial EXCO, that is, where new mandates are funded, their costs should be included in the "A-budget." It would be unusual however for new mandates to be funded outside of the annual budgetary process, since this would imply that new funding sources had become available, or that spending limits were not being respected. Self-evidently, when new mandates are unfunded, their costs should be included in the "B-budget," since they are in effect new programmes or expansion of existing ones. When the unfunded mandate relates to a shift in the division of delivery obligations between national and provincial governments, the vertical split of the revenue pool should clearly be adjusted accordingly.

5.5.3 Structures and Processes

The budget process described in Section 5.4 above reflects political and especially Cabinet involvement at important points in the cycle, particularly in relation to the approval of the macroeconomic projections and fiscal aggregates, of the indicative allocations to spending agencies, and of the MTEF in both initial draft and final form. However, much of the focus of collective ministerial involvement in budgetary allocations appears to be driven more by technical rather than political considerations, and to be concerned with the division of the overall aggregates between spheres of government and rather less with their allocation within such spheres. This is illustrated by the fact that the review of expenditure estimates of national spending agencies is undertaken at Cabinet level by the MTEF Committee, which is largely a technical committee drawn from the Ministry of Finance and its two associated departments, Finance and State Expenditure. The MTEF Committee appears to interact and negotiate with the managers of line departments, rather than their political heads. Furthermore, ministerial review of national departmental estimates does not appear to happen across portfolios or through a collective Cabinet process.

In the opinion of the Commission, this gap may weaken the achievement of allocative efficiency in the budget, since consensus within Cabinet on trade-offs will be weakened. Allocative efficiency, to repeat, is primarily a political process, rather than a managerial or financial one. The lack of ministerial involvement in this step of the budgetary process may be linked to the absence from the Cabinet of a formal sub-committee responsible for strategic planning and priority setting. The standing cabinet subcommittees -- on investment, social administration and security and intelligence -- develop strategy within their mandated areas, but are not well suited for the task of developing a holistic perspective.

An important consequence is that financial criteria, understandably and appropriately emphasised by the Minister of Finance and the MTEF Committee, have come to dominate individual departmental planning processes, since such criteria represents the only "broad" strategic perspective within the debate.

One illustration of this, as Chapter 3 shows, is the experience with "rightsizing." Although originally located by the WPTPS within a broad strategic and developmental perspective aimed at achieving a more optimal allocation of human and other resources within and between departments and spheres of government, right-sizing has increasingly been situated within a fairly narrow budget-driven perspective. As a result, and as the Minister for the Public Service has acknowledged, right-sizing has largely failed to meet its original objectives and has resulted in a number of unintended adverse consequences for service delivery, staff morale, and the transformation process more generally.

There is therefore a strong case for establishing a Finance Committee as a sub-committee of Cabinet to promote the effective integration of the strategic planning and budgetary processes, and ensure effective political oversight of them.

This committee would be chaired by the Minister of Finance, and its decisions would take the form of recommendations to full Cabinet. The key functions of this new committee would be to review departmental priorities and budget estimates; proposals for new programme/service expenditure and for programme/service reductions or savings; and proposed amendments to the budget during the fiscal year. Similar finance committees should be established in the provinces. These would be chaired by the MEC for Finance and would report to the provincial EXCO.

The need for more emphasis on an integrated approach to strategic planning within the national cabinet (as well as provincial EXCOs), and closer alignment and coordination with finance, is paralleled at the level of the technical bodies charged with the responsibility for supporting cabinet and the finance ministries. The Cabinet Secretariat and the new Coordination and Implementation Unit need to put more emphasis on strategic planning and prioritisation across departments. Together with officials from Finance and State Expenditure, they also need to work more closely to ensure greater harmony between the planning and budgeting processes. This could be initiated, for example, through the establishment of a Technical Planning Committee to support the Cabinet Finance Committee proposed above.

Whilst the institutions charged with responsibility for promoting effective inter-governmental relations in the budgetary and financial fields (such as the FFC, the Budget Council, the Inter-Governmental Forum, and the associated technical support committees) have achieved significant success, scope for further improvement continues to exist, especially in relation to the coordination of sectoral programmes with national and provincial budgets. Problems and challenges facing inter-governmental relations are discussed in greater detail in Chapters 2 and 3, together with recommendations for overcoming them.

Parliament is the ultimate custodian of the public purse, exercising influence over both resource allocation and monitoring. The annual enactment of the budget, via the associated appropriation bill, enables the legislature to exercise control and judgement over public resource allocation. Parliament is also a central conduit for public participation in policy making. This indirect role of the legislature is critical for deepening democracy. However this de jure power is not sufficient to provide a meaningful role for the legislature. Under apartheid, for example, Parliament was reduced to a mere rubber stamp for the executive.

Although pending legislation will allow Parliament to amend budget submissions within limits, the effective strengthening of the legislative role in the budget process will require two main issues to be addressed simultaneously. These are firstly the need to increase the time available to Parliament to undertake a review of budgetary options, to avoid the current situation where Parliament is still debating the budget whilst the Departments have begun actual spending and contractual obligations; and secondly, to improve the accessibility and transparency of the reporting format of the budgetary data.

Given the recently increased powers of provincial legislatures with respect to budgetary control and oversight (referred to earlier in this section), the same two issues will need to be addressed at the provincial level.

5.5.4 Financial Management and Administration

It is well-known that there are serious problems with systems of financial management in the public sector in South Africa, particularly though by no means exclusively in the provinces. Such problems have been the subject of official reports (most notably by the Auditor-General and the DPSA's Provincial Task Teams), as well as frequent and sometimes sensational newspaper accounts. The persistence of serious shortcomings in financial management and administration can be attributed, inter alia, to:

The lack of reliable and up-to-date information and computerised management information systems, as well as human resources capacity (see later in this section);
The lack as yet of an effective ethos of probity within the public service;
The lack of effective monitoring, control and disciplinary procedures to identify waste and corruption, and to deal promptly (as well as fairly) with offenders when identified;
The disappearance of large amounts of financial and personnel records during the transition period;
The lack of complete information regarding state assets, rendering effective asset management a serious problem, especially in relation to the running of government garages and the management of government vehicles.
The lack of clarity surrounding the respective roles and responsibilities of Ministers/MECs and senior officials in relation to budget decision-making and control.

Without under-estimating the seriousness of such problems, it should nevertheless be borne in mind that many of these problems were inherited from the previous regime. Moreover, it should also be recognised that the substantial time and effort invested since 1994 in creating the new system of governance in South Africa has undoubtedly narrowed the time available for rectifying deficiencies in financial administration, and in the development and training of financial management resources.

In addressing these problems and challenges, the most urgent task is to establish functioning processes for financial and payroll control, cash management, and asset and liability management. But this creates a dilemma for the budgetary reform process. On the one hand, this task could be most effectively be accomplished in the short term by improving the capacity of existing systems, and by centralising their operation as far as is feasible. On the other hand, a move towards a programme and performance-based system of budgeting and financial management, as advocated in this report, requires increased decentralisation of systems, including financial management, as well as a complex and time-consuming shift to different systems, such as accrual rather than cash accounting. Paradoxically therefore, restoring the health of the system in the short-term may well create disincentives and institutional obstacles to longer-run transformation.

Given these realities, it seems unwise to the Commission to try and address all of the areas of finance administration simultaneously. What will be needed instead is a systematic, phased and well-prioritised approach which addresses the fundamentals first (improving current systems and human resources capacity), whilst planning effectively for the gradual introduction of more fundamental reforms (such as accrual accounting), some of which might usefully be implemented and monitored on a pilot basis.

In addition to restoring the functionality of financial management systems, it is essential that they be complemented by performance management processes, to enable programme review and evaluation on the basis of outputs. Financial management should itself be re-oriented to focus on output-linked expenditures, rather than simply controlling inputs, so that budgeting based on programme outputs can be effectively monitored. An important part of this process will be the production of financial and performance reports (as a critical ingredient of transparency), more timeously, more frequently and in a more accessible form than currently is the case.

5.5.5 Procurement

Procurement policy is a controversial and much debated area in the South African public service. Tender regulations and Tender Board procedures are regarded as problematic by a large number of national and provincial departments, judging from their presentations before the PRC. Departments often see the procedures as too bureaucratic and not transparent enough. In many cases, delegation limits are perceived to be set too low to be appropriate. Unnecessary delays occur as even very small purchases are referred to provincial Tender Boards. Protracted tender procedures are one of the main explanations given by departments for the frequent delays in service delivery, especially in infrastructure departments.

The Green Paper on Procurement Policy now being assessed and debated focuses on two main aspects of procurement reform. One relates to socio-economic objectives including simplification, the elimination of corruption and the creation of an enabling environment for small, medium and micro enterprises (SMMEs). The other aspect is good governance, including procurement practices and auditing to ensure good and sound financial control. The reforms proposed in the Green Paper appear to be well in line with the general principles of efficient financial management -- decentralized management authority, based on a comprehensive legal framework (including rules for documentation), and a control and monitoring system to ensure that agencies comply with national legislation. Similar institutional arrangements have worked well in other countries. The recommendations in the Green Paper are also broadly in line with those in the special study on procurement commissioned by the PRC.

Although the Commission therefore broadly endorses the proposals contained in the Green Paper, we feel that a phased and gradual approach to implementation will be necessary. This may well entail the retention of the Tender Boards whilst capacity to operate the new system is developed. A complicating factor is the need to combine competitive and efficient procurement practices with the achievement of socio-economic targets related to the development of SMMEs. It will be a difficult but necessary challenge for spending agencies to find a balance between cost-effective procurement in the narrow sense and wider socio-economic needs.

5.5.6 The Role of IMST in Budgeting and Financial Management

As Chapter 6 shows in more detail, it is anticipated that Information Management, Systems and Technology (IMST) will play an increasingly important role in public service performance and delivery, including the performance of budgeting and financial systems. Currently, however, the contribution of IMST, though growing in importance, is constrained by a number of factors, including:

The absence of an overall IMST strategy and implementation plan for the public sector;
The widespread use of incompatible platforms, networks and applications;
The lack of a coordinated approach to the use of IMST;
Information is not shared or re-used in any organised manner;
Unnecessary duplication of functions and systems between line departments and provinces;
The low level of investment in IT training, especially for Black people and women;
The lack of executive and senior manager awareness;
Problems in procurement.

More specifically, there are particular problems with the main legacy systems used for financial and personnel planning and management. All national departments and most provinces (Mpumalanga and the North West are the exceptions) utilise the Financial Management System (FMS) as their main financial information system, despite the fact that it is generally regarded to be out-dated and inadequate for the new types of budgetary and financial management proposed in this report. Another set of problems has been documented in the management and control of expenditures on personnel. All departments are reported to be using the PERSAL system, although not all are reported to trust the data in it. The difficulties appear to arise from amalgamating data, keeping it up to date, locating records, and establishing effective controls. Chapter 6 of this report proposes a range of recommendations for addressing these and other problems related to IMST.

5.5.7 Capacity Building for Budgeting and Financial Management

A recurrent theme throughout this chapter, as well as the report as a whole, is the need for a major investment in public service training, staff development and capacity building as an indispensable precondition for the success of the public service reform process in general, and the reform of budgetary and financial management systems in particular. Current problems and challenges relating to human resources development are discussed in greater detail elsewhere in this report (especially in Chapter 4), together with proposed strategies for addressing them. Many of these problems and recommendations apply equally to the areas of budgeting and financial management. But there are also a number of specific points that need to be raised in this context.

The first is the fact that the shortage of and trained qualified staff in the financial field is particularly acute. This is attributable in the main to the general shortage of such skills in South Africa as a whole, competition from the private sector, problems in post classification which are frequently too low to attract and retain the most qualified people, and the large loss of experienced staff that has resulted from the granting of voluntary severance packages. The second and related issue is that the lack of financial and related skills (in economics and planning for example) is particularly pronounced amongst Black people and women, with obvious implications for strategies for improving representivity in such areas.

The third issue concerns the question of the current versus future purpose of human resources development. Should staff be recruited and trained to operate existing systems more effectively (involving skills in procedure and control), or should the focus be on preparing staff for the new performance and results-oriented approaches to budgeting and financial management advocated in this report (involving skills which are more creative and analytical)? There is no easy answer to this question, but one obvious implication is that current systems of human resources planning (the limitations of which are detailed in Chapter 4) will need to be dramatically improved if they are to cater effectively for both current and future needs. Catering for future needs will involve, inter alia:

Anticipating and devising the budgetary, financial and associated competencies required at different levels;
Conducting a comprehensive of current competencies;
Working with SAMDI, tertiary institutions, professional councils and other education and training providers to design appropriate forms of training and staff development that can effectively address the gap between current and required competencies.

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5.6 Observations and recommendations for further reform

This chapter of the Commission's report calls for a new approach to budgeting and finance that is mission-driven and capable of linking purpose, resources and results to promote a more effective system of service delivery that combines quality with value for money. Such an approach should encourage long-term thinking and help political leaders and senior managers to make better choices and set effective but realistic priorities. It should also help to remove needless constraints on managers' use of resources, to encourage innovation and provide positive incentives to manage effectively, to cut wasteful spending, and to convert accountability for spending money to accountability for achieving results.

The Commission welcomes and endorses the progress that has already been made in this direction, particularly through the MTEF framework, but recognises that there is still some way to go and a variety of obstacles to overcome in the process. This section offers a number of recommendations that the Commission feels could help to move the process forward. These flow from the issues raised in the previous section, and are also based on our study of international best practice.

5.6.1 Programme Budgeting and Output-Based Performance

The Commission recommends:

That plans for a Performance Based Programme Budgeting (PBPB) system be prepared for discussion and approval by the extended Cabinet. Support from the extended Cabinet should signal political commitment at the highest level for the introduction of this new budgetary approach.
That this PBPB system be based along the A-B-X lines outlined earlier in this chapter, whereby:
- the A-budget reflects the costs of continuing existing programmes and services;
- the B-budget reflects the costs of new programmes;
- the X-budget reflects the cost savings to be achieved through efficiencies and through discontinuing or redesigning programmes that do not meet government priorities.
That after adopting the PBPB system, the extended Cabinet should approve a specific phased plan of transition to the new system and communicate it to all departments/ agencies within government. The timing and sequencing of the phased implementation is crucial since it would determine the critical resource needs (human and financial) and skills to ensure successful implementation.
That the extended Cabinet consider the formation of an implementation task team headed by the Minister of Finance, and composed of senior officials drawn from the DoF, the DoSE, the DPSA, provincial heads of finance, outside experts with competencies in financial management, and other relevant stakeholders. This task team would be responsible, inter alia, for:
- Project managing the entire transition from the current to the proposed PBPB budgeting system;
- Identifying potential risks associated with each step prior to implementation and taking adequate precautionary measures;
- Ensuring that the necessary human resource capacity (with special emphasis on financial planning and management skills) is developed before a new phase is initiated.
- Developing written guidelines and instructions to outline and explain the main components of the A-B-X system;
- Providing a common set of assumptions and methodologies for developing consistent A-base costs and B- and X-budget options.

5.6.2 Costing and Accounting Systems (to support the new approaches to budgeting and financial management)

The Commission recommends:

That, to facilitate the implementation of the PBPB approach to budgeting, a system of activity-based costing be devised and introduced throughout the public service. Such a system will be designed to ensure:
- that all the input costs associated with a particular programme can be identified (through apportioning where appropriate) and summed;
- that the analysis of estimated future costs of such inputs is used effectively to forecast future programme costs;
- that the MTEF based on the new approach to PBPB reflects the true cost of service delivery.
That the design of this new costing system be included in the terms of reference of the implementation task team proposed above.
That current computerised systems are modified and up-dated to provide the necessary information required by activity-based costing.
That appropriate guidance, support and training is provided to ensure that success of this new costing system.
That serious consideration be given to the phased introduction of an accrual accounting system. Given the magnitude of the task involved, the relative costs and benefits of moving towards such a system would need to be researched and evaluated in detail, possibly by the implementation task team mentioned above or perhaps more appropriately by a special team set up for this particular purpose.

5.6.3 Managerial Responsibility and Accountability

The Commission recommends:

That the current move towards performance-related contracts for heads of department be expedited to provide the necessary incentive for them to exercise effectively and accountably the responsibility that has been decentralised to them by recent policy and legislation (notably the 1997 Public Service Laws Amendment Act).
That the process of formulating clear and appropriate performance measures and indicators also be expedited as a matter of urgency;
That effective monitoring and review processes be put in place to evaluate the workings of the new system of decentralised management (see below for more details).
That other issues central to the successful decentralisation of managerial responsibility be addressed, through enabling legislation where necessary. Such issues include, inter alia:
- Arrangements regarding the Central Bargaining Chamber
- Centralised staff recruitment and retrenchment procedures
- Centralised procurement
That, in order to ensure that effective, timeous and responsible decision-making takes place at all levels within the public service, a similar process of decentralisation be encouraged and expedited to individual cost centres within departments, again tied to the achievement of specific performance objectives.
That appropriate levels of support and guidance be provided to managers to enable them to exercise these decentralised powers efficiently and effectively.

5.6.4 Broadening Participation in the Budgeting Process

The Commission recommends:

That more effective structured opportunities be created for popular debate and involvement in the budget process, especially in the earlier priority setting stages.
That more time be structured into the budget process to allow for public hearings by the relevant national and provincial financial committees.
That budgetary information should be provided in a more accessible, timely and user-friendly form.

5.6.5 Monitoring, Evaluation and Review

The Commission recommends:

That the National Government and each provincial government should establish a Programme Review Unit, most probably within the Finance or State Expenditure Departments. Such a unit will help to create a coordinated framework for conducting programme reviews and administrative efficiency reviews.
That such units, together with departments and central planning units, should establish a timetable for the review of programmes and administrative efficiencies on a regular basis.
That each programme review unit should focus on developing a core team of skilled staff and external expertise to supplement and guide specific programme review teams.
That co-ordinating machinery be put into place to ensure that these units liaise effectively with other monitoring and evaluation structures outlined or recommended in Chapters 2 and 3 of this report.
That each department or agency be required to produce an annual report that would include, inter alia:
- An account of service delivery over the year with an associated cost analysis
- A description of key operational changes that the department intends implementing in the light of the current year's service delivery performance
- An assessment of how the service delivery outputs produced by the department contributes to achieving its sectoral outcomes
- An assessment of how the department's service delivery outputs contributes to overall government goals (i.e. a cross-sectoral analysis of how a department's service delivery outputs are likely to impact on outcomes in other sectors).
That the Department of Finance in its annual report should, in addition to the above, also include:
- An account of the unfolding of the PBPB system relative to the phased plan approved by Cabinet;
- A report on measures adopted with regard to increasing legislature involvement and civil society participation, as well as an assessment of their success;
- A evaluation of the operational efficiency of cross-sectoral coordination within government;
- An evaluation of progress in relation to fiscal discipline, allocative efficiency and technical efficiency across government.
That, as the Auditor-General's traditional role as the watch-dog of procedural financial control will be diminished under the new budgetary system, the role of the AG be re-focused on the performance evaluation of all key service delivery departments at national and provincial level.

5.6.6 Unfunded Mandates

The Commission recommends:

That, when new norms, standards, programmes or policies that have cost implications for one or more spheres of government are adopted outside the normal annual budgeting process, the financial implications should be presented to Cabinet/EXCO as part of the decision-making process before final approval is given. In this case, these costs should be included in the A-budget (the base budget) during the normal budget process.
That, if specific new norms, standards, programmes or policies have not received Cabinet/EXCO approval for funding by the time the budget process is under way, these costs should be included in the B-budget, for explicit consideration by Cabinet/EXCO.
That, when a national decision or policy imposes costs on provinces, the National Government should make provision for those costs in its budget, or in the vertical split of nationally collected revenues. If the National Government's position is that the costs should be borne by the provinces, it should seek provincial EXCO concurrence in respect of such costs before giving final approval for the policy.
That, when considering White Papers, Cabinet should follow the same approval process as any policy decision outside the normal annual budgeting process, including explicit consideration of the fiscal implications.

5.6.7 Structures and Processes

The Commission recommends:

That a Finance Committee be established as a sub-committee of Cabinet to promote the effective integration of the strategic planning and budgetary processes, and ensure effective political oversight of them. This committee would be chaired by the Minister of Finance, and its decisions would take the form of recommendations to full Cabinet. Key functions of this new committee would include:
- review of departmental priorities;
- review of departmental budget estimates;
- review of proposals for new programme/service expenditure and for programme/service reductions or savings;
- review of proposed amendments to the budget during the fiscal year.
That similar finance committees be established in the provinces. These would be chaired by the MEC for Finance and would report to the provincial EXCO.
That appropriate technical planning committees be established to support the work of these finance committees at both the national and provincial levels.
That these technical committees work closely with the Cabinet Secretariat, the new Coordination and Implementation Unit, and officials from Finance and State Expenditure, to ensure greater harmony between the planning and budgeting processes.
That Ministers and MECs, both individually and collectively, should play a more proactive role in the budget process.
That the anticipated Treasury Control Act should clarify more clearly than at the present the respective roles and responsibilities of Ministers/MECs and senior officials with respect to budgetary decision-making, control and accountability.
That reforms take place in the structures of inter-governmental relations, in line with recommendations contained in Chapters 2 and 3 of this report, to facilitate the more effective reconciliation and harmonisation of national and provincial priorities, and the coordination of sectoral programmes with national and provincial budgets.
That the important role of the National Parliament and provincial legislatures in the budget process should be enhanced, inter alia, by:
- Modifying the timing of the budget cycle to allow a minimum of four months for Parliament to evaluate the budget and forward estimates, to consider and propose possible alterations, and to conduct effective public hearings;
- Revising the format of the "White Book" of budget estimates to furnish MPs/MPLs with as much relevant information in as accessible a manner as possible;
- Enabling Parliament to alter appropriations across votes within the overall aggregate budget constraint (in line with the general thrust of the Amendments to Money Bills Procedure Bill);
- Instituting effective capacity building programmes for parliamentarians and their support staff, especially in the areas of financial control and accountability.

5.6.8 Financial Management and Administration

The Commission recommends:

That priority should be given in the short to medium term to reforming the fundamentals of finance administration -- namely:
- systems for financial and payroll controls, that are required to ensure not only budgetary control, but also the probity and honesty of individual transactions;
- cash management, relating to financial flows;
- asset and liability management -- having to do with complete and accurate records of assets and liabilities, and with honesty and probity in the use and disposition of such assets; and in the processes for managing liabilities.
That more radical reforms of the accounting system (in particular the replacement of cash accounting by the more preferable accrual accounting system) should be deferred until these fundamentals of financial administration are in place.
More specifically, that a series of task teams be established to work with departments and provinces in developing and strengthening their capacity in the above areas. These task teams should be mandated:
- To assess the effectiveness of current systems, processes and capacities;
- To identify specific changes, training and other support required;
- To provide appropriate "on-the-ground" training to key staff on new systems or processes, or on existing processes that are not currently fully utilized;
- To provide opportunities on the task teams for "interns" from departments and provinces who would gain valuable experience by working alongside more experienced practitioners;
- To develop, in conjunction with departmental and provincial staff, a written financial reference guide that provides a detailed step-by-step description of standard processes as a further aid to staff training, development and awareness.

5.6.9 Procurement

The Commission recommends:

That, in implementing the decentralised system of procurement proposed in the Green Paper on Procurement Policy (which the Commission endorses), a phased and gradual approach be adopted. This may well entail the retention of the Tender Boards whilst capacity to operate the new system is developed.
That appropriate guidance and support is provided to departments/provinces to assist them in balancing the needs for cost-effectiveness in procurement with the broader socio-economic aims related to the development of SMMEs.

5.6.10 The Role of IMST in Budgeting and Financial Management

The Commission recommends:

That a major development and upgrading of IMST takes place, in line with recommendations in Chapter 6 of this report, to assist the processes of reform and performance in the public service in general, and in the areas of budgeting and financial management in particular.
More specifically, that FMS and PERSAL be supplemented by a system of financial management and monitoring designed to generate regular reports on service delivery and associated expenditure. The focus of such reports should be on areas such as expenditure patterns, service delivery and performance measures and indicators.

5.6.11 Human Resources Development and Capacity Building

The Commission recommends:

That a major investment in HRD takes place in line with the recommendations in Chapter 4 of this report, and within the new framework recently laid down by the White Paper on Public Service Training and Education. This will be vital to ensure that the necessary skills and capacity are built for the new systems of budgeting and financial management proposed above.
With regard more specifically to budgeting and finance, that special attention needs to focus on issues such as :
- The recruitment and retention of capable staff;
- Changes in the post classification and salary structures to ensure that competitive salaries are paid for those staff whose skills are in scarce supply;
- The recruitment, training and fast-tracking of officials from previously under-represented groups;
- Anticipating and devising the budgetary, financial and associated competencies required at different levels for the new systems and approaches proposed in this chapter;
- Conducting a comprehensive audit of current competencies;
- Training and capacity building for MPs/MPLs and their support staff to strengthen legislative oversight over budgetary and financial matters.

Chapter 6: Information management, systems and technology

Introduction
Vision and strategy for IMST
The macro-institutional context
Meeting national objectives
Public service programme
Operational requirements
Human resources development and training
Financial and budgetary requirements
Summary of main recommendations

6.1 Introduction

6.1.1 Information Management, Systems and Technology in the Public Service

This chapter seeks to describe the problems currently associated with Information Management (IM), Information Systems (IS) and Information Technology (IT) in the public service. It also seeks to go beyond these problems to identify options for transformation, which should contribute to overcoming such problems. In developing these options we have benefited both from the opinions of IT practitioners in the public service and private sector as well as from international precedents.

In this chapter, we believe that information is a fundamental resource of government, along with people, money and organisations. In the context of such an understanding, we therefore analyse three inter-related aspects of the information concept.

Information Management (IM) concerns the management of information resources in government. As such it focuses on the use of information, the roles and responsibilities of those using the information resources and the controls, performance measures and business processes and objectives related to their use.
Information Systems (IS) focuses on applications required to manage the information resources. It is therefore concerned with the development, operation, maintenance and upgrading of the systems used to achieve business objectives.
Information Technology (IT) focuses on the technology required to support the applications or systems. It therefore focuses on the technological choices and standards required to make these choices to support the particular systems involved in the overall information management strategy.

Since the use of the information resource encompasses all three aspects of management, systems and technology, we will endeavour to refer to these different aspects when discussing specific issues. However when referring to all three aspects at once, we will use the term Information Management, Systems and Technology (IMST) on the assumption that it subsumes the others.

Although the primary focus of this chapter is the use of systems and technology to manage information in the public service, it is believed that such practices can only be understood in the context of developments in information management, systems and technology more generally. It is argued that the state may have a major role to play in promoting the "information society"and consequent use of IT in South African society as a whole, but it is recognised that current public service practice lags behind that of the private sector in South Africa who are themselves slipping behind developments elsewhere in the world. As a result the public service in South Africa is falling dangerously behind its public and private sector counterparts internationally.

In proposing options for transformation therefore, we have sought to identify best practice internationally. Although the private sector has played a leading role in the development and use of IMST, there are some valuable precedents such as in Australia, Canada, Singapore, Malaysia and the United States where other governments have taken the initiative. These, and other examples, suggest that the current shortcomings in the use of information management systems and technology in the South African public service may be overcome if sufficient political will is mobilised to address the systemic problems identified below.

It should also be noted that the view of IMST advanced here by the Commission is that of seeing the technology as being driven primarily by the business objectives of the state, and not the other way around. Even though we argue that information technology can significantly change the manner in which the public service conducts its business, and indeed should be used to radically re-engineer its processes, we believe that this transformation must be shaped by the strategic and operational requirements of the public service, particularly in relation to the provision of efficient, effective and equitable service delivery.

Indeed, we strongly support the position that all important decisions regarding IMST should come from the senior political and managerial leadership of the state and not be delegated to the technologists. The management of information, and the systems and technological choices arising from this, should be seen as equally important by senior political and management as are the management of people, money and organisations in the public service.

6.1.2 The Nature of the Problem

The essential nature of the problem is that current systems and technology applications in the public service cannot, in their current form, come close to meeting requirements of the new South Africa. The problem consists of two realities:

The huge financial resources that the country has already invested in technology and systems;
The dire need for the public service to leverage this investment in its quest for transformation.

In an area of human endeavour that demands that individuals acquire knowledge and skills as an on-going process, the public service has not benefited appreciably from the billions spent, nor does it have any significant pool of skilled IM resources. This problem area is possibly the most critical and demands to be resolved before any real progress at transformation can be made.

6.1.3 The Different Uses of IMST in Government

Technology and systems have been used for transaction and control purposes for many years, and in the past couple of years, new management information systems are being operationalised to supply strategic planning and policy decision-making. Very recently, the use of IMST is being tested to enable the electronic delivery of certain public services through kiosks and other mechanisms.

At present information regarding transaction and control data is managed in the South African public service using electronic means. In many cases -- such as the transversal financial and personnel management systems (FMS and PERSAL), the case management systems used by the Police, the motor vehicle registration systems used by Transport, the pensions and unemployment insurance systems used respectively by Welfare and Labour, and the subsidy management system used by housing -- the use of IMST is now essential. In these circumstances, what matters is whether these systems work properly. It is not a question of whether or not to have IMST, but whether we have good or bad IMST.

Finally, it should be noted that IMST is being used increasingly to deliver services directly to the public. Indeed in the international arena this is currently one of the most exciting developments in the IMST field. The range on services that can be delivered directly using IT include information and transaction kiosks which enable citizens to access their government institutions 24 hours a day. The also include advances in IT-enabled medicine and education where international expertise can be delivered to remote areas via Internet technology or equivalents. Although South Africa has yet to advance very far along these avenues, it is likely that IMST enabled delivery will become an option in the near future.

6.1.4 Pros and Cons of IMST in Government

All these different uses of IMST in government raise the inevitable question in the South African context of whether a country already over-burdened with large-scale unemployment, lows levels of scientific and technological education and a vast rural population currently outside of the reach of electronic communication should invest further in such advanced technology. There is a legitimate concern that further advances in the information society will merely exacerbate the existing divisions between rich and poor, urban and rural, and the technologically informed versus the technologically marginalised.

There are no easy answers to such a question since there is little to suggest that, without conscious interventions, such technologically marginalised groups will ever succeed in gaining gain access to the information society. There is reason to believe, however, that current information technologies and systems have greater potential than earlier ones to access the poor, rural and technologically marginalised sectors of society. However the extension of the information society to these groupings will only happen if there is an explicit commitment from government to ensure that they are included.

The extension of the information society in South Africa is therefore both feasible and desirable if it can be used to assist all segments of society to make use of the new information tools and systems. There are also compelling arguments to suggest that South Africa cannot afford not to continue to invest in appropriate information technology. These reasons range from the fact raised above that many of the basic operations of government are now entirely dependent on such technology, to the argument that the country's economic future relative to the rest of the world will also be determined by the extent to which it seeks to keep abreast of technological developments elsewhere.

6.1.5 Summary of Main Findings

6.1.5.1 Executive Awareness

From the Commission's hearings, investigations and studies into this area, we are convinced that there is quite a high level of awareness and understanding among senior managers in the public service about the need for and uses of IMST, about the problems and challenges in devising and implementing effective IMST strategies, and about possible solutions. However, the difficulties of taking over and transforming the current public service, and the overwhelming responsibilities of addressing pressing problems of delivery, have meant that they have either:

Decided to live with the existing state of affairs, however constraining; or
Embarked upon short-sighted IMST initiatives designed to address their immediate difficulties with little or no attempt to seek systemic solutions to problems operating across different line departments and spheres of government.

While it is not expected that government executive ranks should become experts in technology, it is imperative that they should have an adequate understanding and appreciation of the main issues, challenges and opportunities involved. In particular, there should be enough understanding of IMST to enable senior management not only to deal with current problems but also to position their organisations to meet future objectives in new and different ways. It is therefore imperative that targeted executive level IMST training should be introduced as a matter of urgency.

6.1.5.2 The Basic Building Blocks

The Commission believes that immediate steps should be taken to put in place certain basic building blocks to ensure that most future IMST developments in the public service share a common set of features that will contribute to their ultimate improvement in the longer-term. We believe that these building blocks will include an object orientated open systems architecture primarily based upon commercially available IT systems. The building blocks thus must at least include the definition of the following technical components:

Networking protocols
Operating Systems
Data and database standards
Middle-ware
Transaction Processing
Desktop environment
Basic documentation standards
Use of the Internet medium

The definition of these technical standards would enable any system to share data and inter-operate with any other even if the original program specifications did not mandate such sharing. Such standards are not designed to limit departmental and provincial autonomy, but to facilitate system choices that are compatible. They would also enable the public service to more readily extend the capabilities of the current systems and obviate the need to replace them in the short term. The move towards this kind of systems architecture, we believe, would help:

To ensure greater inter-operability and integration of different applications;
To facilitate continuous improvement in the technology and human resources in the state; and
To overcome current skills shortages and service bottlenecks.

6.1.5.3 Short Term Procurement Moratorium

In order to spur the adoption of these basic building blocks, the Commission proposes an immediate short-term procurement moratorium on all large IT systems while a basic framework is agreed. Although the full extent of current large system procurement is unknown, it is estimated that more than R2 billion worth of IT is currently in the process of being acquired. Since many of these systems are likely to be operational in the state for the next 10 to 20 years, and since it is understood that a number of these large systems are not based on the above building blocks, the Commission believes that the interests of the country would be served by such a moratorium, while agreement is reached on the basic features of all new systems.

A two to three month delay in procurement is unlikely to have a significant impact on short-term delivery, but it will ensure the longer-term viability and improvement of IMST within the public service. Once the basic framework has been agreed, departments procuring new systems will only need to certify that their systems incorporate the basic building blocks prior to proceeding with the procurement process. In order to ensure that no mission critical IMST expenditure is delayed, public service agencies will be able to seek emergency approval for urgent expenditure from a Moratorium Committee which the Commission recommends should be set up to oversee the process.

Although the procurement moratorium may be seen by overburdened bureaucrats as an additional obstacle to addressing short-term transformation and service delivery needs, we believe that it will not be difficult to achieve agreement on the basic building blocks since they incorporate all the characteristics of current best practice accepted by both the public and private sector unlike. The moratorium will therefore provide the political will to focus the attention of different public service role-players on achieving a rapid agreement on commonly shared IMST principles.

6.1.5.4 Business Process Re-engineering

In the medium term, the Commission advocates the adoption of business process re-engineering techniques to ensure that there is a correspondence between the business objectives of different functional government agencies and the IMST used to meet these objectives. Although we accept that political and business objectives should drive the re-engineering of processes in government, we believe that the form of information systems and technology becoming available is likely to make a significant contribution to the restructuring of public service activities as they are currently being performed. Already the concept of business process is being used in the inter-ministerially driven National Crime Prevention Strategy, and we believe that this model could be applied to rationalise other line function activities across government.

6.1.5.5 Alternative Service Delivery

Information is pivotal to the performance and capacity of government services and the nation's economic competitiveness. At issue is whether we can use information technology effectively to empower government, the private sector, and citizens alike. The complexity of today's world demands that the public and private sectors not only learn to master this tool, but also to work cooperatively to maximize the national benefits. To achieve this, the public and private sectors must engage in innovative partnerships that share the costs, risks and rewards of developing technology-based solutions. To this end, the Commission refers to the pioneering work on Alternative Service Delivery (ASD) as a model for developing new public-private partnerships for IMST delivery (see Section 6.8.3 for a fuller discussion of ASD).

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6.2 Vision and strategy for IMST

6.2.1 Context

It is clear to the Commission that the Government lacks an overall vision and strategy for IMST and that, in the absence of such a strategy, individual departments are finding it difficult to define their own IMST strategies. Most departments are therefore pursuing their policy agendas independently, with IT systems being developed and/or operated to meet only the specific departmental policy objectives. In the absence of effective policy coordination, IMST strategy is likely to remain incoherent. The cost implications of this situation are enormous.

The absence of an IMST strategy is itself a consequence of the fact that IMST is not generally understood in terms of the Government's overall vision or mission. Although there seems to be considerable attention given to IMST questions and a significant investment in IT systems, IT is seen at best as an instrument of achieving other government objectives. At worst, current IT systems are seen as an obstacle to improving overall performance in the public service.

6.2.2 Towards a Strategy for IMST

Recently a number of initiatives have pointed to the need for a coherent and coordinated strategy for IMST in government, and made a number of practical proposals in this regard. These include:

The DPSA's objectives for the Government Information Project (GIP);
The DPSA sponsored workshop on IT Business Architecture for the Public Service, held in November 1997;
The position paper delivered by South African public and private sector IMST experts at the Information Society and Development (ISAD) international conference in 1996;
The Department of Communication's (DoC) work in promoting a National and Government Information and Communication Technology Strategy (Info-Com 2025).

6.2.2.1 DPSA's Vision

The DPSA has identified a Vision for IMST use in government. There is, however, no indication of what support the vision currently has across the public service. The vision is stated as follows:

"IT will be aligned with Government Business Goals and will be a change agent to create a responsive, result oriented, value added Public Service."

6.2.2.2 The GIP Project

The objectives identified by the DPSA for the GIP project perhaps best summarise the key focus areas of any IMST strategy. They include the following:

To promote the concept of information as a strategic resource to be managed as any other resource;
To facilitate the creation of a culture of sharing and re-using information;
To promote the principle of aligning information and IT strategies with business strategies, objectives, and processes;
To promote the concept of re-engineering of processes to ensure that they all add value to the service being provided;
To identify and coordinate transverse information sources and needs;
To investigate and establish norms, standards, principles and mechanisms to enable information sharing;
To build capacity in government to better manage information.

6.2.2.3 IT Business Architecture

The DPSA has developed these ideas further through a workshop to define a business architecture for IT in the public service for the next one to five years. The workshop, which involved about 100 public servants involved in IMST, came up with objectives similar to the above. In particular it sought to stress that IT "is not a support function to the public service, but that it is central to service delivery. The workshop also developed a series of recommendations concerning transformation, leadership and organisation, human resources, IT processes and architecture and procurement which complement those provided in this chapter.

6.2.2.4 ISAD Policy Paper

Apart from the DPSA vision, the most clearly stated position of government has been the position paper delivered to the Information Society and Development (ISAD) International Conference in 1996. Although the main focus of the paper was to develop and promote the greater use of IMST in South Africa at large, it also proposed a number of pilot projects which would involve the public service directly. These pilot projects included:

Multi-purpose community centres (MPCCs)to ensure that those traditionally marginalised from IMST would get access to the benefits of an information society,
The development of centres of excellence and resources (CEERs) to ensure that South Africa makes a contribution as a producer and not just a consumer of IT products,
The development of IT related education and training standards within the ambit of the National Qualification Framework,
A proposal to broaden access to public service information through an on-line Internet enabled system;
The promotion of an IT enabled Contemporary Music and Arts archive.

Although these projects are not in themselves a strategy, they include elements of such an overall IMST strategy. The paper proposes in particular that a task team be established of all relevant stakeholders to contribute to a report on the "Vision, Principles and Strategy for the South African Information Society." It also proposes that the process of formulating Green and White Papers on the Information Society should be undertaken. As far as the Commission can establish, these proposals have not yet been formally endorsed, although a number of Departments (Communication, Public Service and Administration) are tackling aspects of them.

6.2.2.5 INFO.COM 2025

In an unrelated but parallel initiative, the Department of Communications (DoC) won cabinet support to promote the National and Government Information and Communication Technology Strategy. The DoC proposals focus on both information and communications technology (ICT) in both the private and public services. Part of the value of the DoC proposals is that they stress the inter-connectedness of public and private sector ICT activities. On the one hand, they expressly advocate that the current use of government ICT resources be leveraged to "support national strategies for economic growth and access to government services for the majority of South Africans." On the other hand, and to achieve their integrating objectives, the department advocates the use of network systems to "bridge the gap between information technology and communications."

Although most IT professionals in the public service would give qualified support to these initiatives, there is less agreement on the specific form that a future IMST strategy should take. Some favour the production of a government Green or White Paper. Others argue that such documents are likely to be outdated very quickly. They therefore favour a series of projects to be launched to achieve different strategy outcomes. The Commission is concerned that the latter process will not develop a cohesive IMST strategy for the Government or nation. It does however believe that the project method could contribute to such a policy formulation exercise if a suitable institutional process is provided to bring these different policy projects together.

6.2.3 Problems

Notwithstanding the worthy efforts of the above mentioned departments to develop and promote an IMST strategy for the nation and for the public service, the problem at present seems to be a lack of commitment by other actors to buy into this vision. The absence of an overall IMST strategy and implementation plan for the public service at present, has led to the following problems:

The widespread use of incompatible platforms, networks and applications;
Information is not shared or re-used in any organised manner;
An unsustainable broad set of technology skills needed to maintain the systems;
Unacceptably varied and non-standard priorities and approaches to the use of IMST
Unnecessary duplication of functions and systems between line departments and provinces.

These problems have been exacerbated by the pace of technological change, which has speeded up considerably since the introduction of the Internet. Internet technologies have accelerated the rate of innovation and the supply of technology products in the marketplace. This has added an additional important variable in the complex problem-set outlined above by introducing the problem of excessive technological choice. In the proposals discussed further in this chapter, we advocate that policy is required to limit the number of choices to a workable set of universally accepted standards.

6.2.4 Precedents

Given the critical importance of an overall strategy for information management, systems and technology in government, it is ironic that there are few international precedents that can be drawn upon. This is in part due to the relative immaturity of government interventions in this area, and partially due to the fact that in the past decade or so, governments have moved away from grand plans and total solutions. Nevertheless there are a number of precedents that can help to inform developments in South Africa, and in particular the cases of Australia and Malaysia which were studied in some detail by the Commission.

6.2.4.1 The Australian Strategy

In many ways, the Australian strategy provides the most comprehensive example. Their approach to policy formulation has seen a progressive development of an overall IMST framework over a period of three years. Central to their approach is the establishment of a number of institutions and officers to ensure that the policy process is coordinated and ultimately integrated into a government-wide Information Management Strategy. The 1995 document Clients First: The Challenge for Government Information Technology proposed an Office of Government Information Technology (OGIT), a Chief Government Information Officer (CGIO) and the creation of a Government Information Services Policy Board (GISPB) all tasked to contribute to the development of an overall IMST strategy. Their 1996 framework, soon to be published as a Blueprint, outlined a number of key strategic objectives for such a policy. These included:

The need for government services to focus on clients and to deliver services in a manner which suits the client;
The use of a "single window" concept of government services available at common locations;
The clustering of IT, communications and corporate services;
The greater standardisation of common administrative systems by agencies;
The reduction of the number of government data centres and the encouragement of agencies to seeks these services from the most cost-effective supplier in government or in industry;
The promotion of technology for service delivery using IT;
The promotion of common solutions across agencies;
The use of a lead agency concept where one agency is supported to develop solutions with wider applicability across government;
The agreement of government-wide IT standards.

The Commission believes that many of these strategy components could usefully be incorporated into an overall IMST strategy for South Africa.

6.2.4.2 The Malaysian Strategy

While the Australian strategy provides most of the component parts for an immediate strategy, the Malaysian strategy for Electronic Government should also be applauded for its far-sightedness. The strategy defines electronic government as follows:

A multi-media networked paper-less administration linking [central] government agencies with government centres around the country to facilitate a collaborative government environment and efficient service to businesses and citizens.

The objectives of the strategy include:

Offering efficient, high-quality administrative on-line services to citizens and business;
Streamlining government's internal processes to improve quality, reduce costs and increase productivity;
Strengthening data security and protecting privacy;
Increasing citizen participation in government;
Creating transparency through good documentation, effective communication and traceability.

Although similar to the Australian strategy, these Malaysian objectives advocate a much more fundamental transformation of government arising from the application of the new information technologies. The Commission believes that when an overall IMST strategy is formulated for South Africa much could also be learned and incorporated from the Malaysian experience.

6.2.5 Options and Recommendations for an IMST Strategy

In line with the project based approach to policy development, it is proposed that current initiatives described above be supported in an attempt to develop an integrated strategy for IMST in government. The DoC projects described above and the DPSA IT Business Architecture and GIP project will contribute to the formulation of an overall government IMST strategy. What is required however is an institutional strategy to ensure that these separate initiatives are ultimately integrated. The key elements of such a strategy are discussed below.

6.2.5.1 Features of an IMST Strategy

Application Integration and Inter-Operability. In suggesting options and making recommendations with respect to the future direction of the Government's IMST strategy, the Commission supports approaches which are likely to promote the integration and/or inter-operability of new and existing systems. Although the concept of an integrated national database has been around for a while, complete integration is not yet technically or politically feasible. There has therefore been increasing emphasis placed on systems that are inter-operable rather than fully integrated. In this context, inter-operability refers to the capacity of different systems to access information from other systems even though the systems may not be integrated (that is, they would use different hardware and software but the software could communicate).
The Internet and the World Wide Web. The manner in which inter-operability is being promoted on the Internet is in the development of industry (and ultimately worldwide) software protocols which enable software to interact with each other. As access and security standards are settled and implemented, this Internet medium becomes a potential doorway to systems for integration and inter-operability. It is proposed that current and future public service IMST use Internet technologies to facilitate inter-operability, and with the appropriate security systems, greater access both within and outside of the state.
Common Operating Protocols. It is likely that in the promotion of inter-operability, more attention should be focused on the formulation of common protocols rather than seeking to standardise information systems across government. The formulation of common protocols may in any case occur without explicit government action as a result of international moves for greater inter-operability.
Common Data Models and Data Objects. The identification system discussed below will form the basis of one set of information standards, which would considerably ease the flow of information concerning personal and corporate identities. Similar object-oriented models may be developed to facilitate further integration and inter-operability. Ultimately the promotion of integration and inter-operability will need more than common data models for information used by public service agencies, but these common data objects will create the basis for developing an inter-operable system. Indeed without such common data objects, integration and inter-operability will remain an impossibility.

6.2.5.2 Developing Strategy

The approach adopted by the Commission on the issue of strategy is that we understand this to be a process which should within a year yield a generally accepted vision, mission and set of objectives for IMST in the public service. In developing such a vision, mission and strategic objectives, the distinction between information management (IM), information systems (IS) and information technology (IT) should be heeded.

Information Management Strategy. As noted in the introduction, IM refers to the roles and responsibilities associated with managing information in government. An information management strategy is concerned with management controls, management responsibilities, performance management and process management. It is likely that there will be only one such strategy for government and that it will evolve over the next two years as greater clarity is achieved with respect to IS and IT strategies. The Australian Framework mentioned above suggests that such a IM strategy should incorporate some or all of the following issues:
- The relationships between business processes, clients and corporate information;
- The costs and benefits of the use of information management;
- The role of IT in supporting IM needs;
- The promotion of collaboration and shared use of information (regarding Group-ware, data-warehousing, directories, standards, etc.);
- The integration of approaches to data administration;
- The role of records in support of business needs.
Information Systems Strategy. IS strategies are concerned with the application of IT to achieve the business objectives of different agencies within the public service. Since business objectives are likely to differ across agencies, there will undoubtedly be a range of IS strategies aligned to the objectives of different business units within the public service. Although IS strategies evolve incrementally as users define their IT needs, it would be irresponsible for new IS strategies to be developed before sufficient agreement is reached on an IT strategy.
Information Technology Strategy. The IT strategy is concerned with the questions of technology policy and is likely to focus primarily on establishing standards for appropriate use of IT in the public service. There should therefore only be one IT strategy for the public service. We have already indicated some of the issues that should be covered by such a strategy. Drawing on the Australian framework, we can define the set of standards which we believe should be covered by any IT strategy in government. This set would include the following:
- Electronic publishing standards;
- Document and database description standards;
- Records management and archive standards;
- Document access, delivery and reading standards;
- Electronic messaging and transaction standards;
- Audio-visual/multimedia/graphics standards;
- Tele-communications standards;
- Spatial data standards;
- Client data standards;
- Security standards;
- Privacy standards;
- Equipment and facilities.

Although we believe that it is essential that an IT strategy is established as soon as possible for government, since it will help to facilitate both the IS and IM strategies, we recognise that it is unlikely and possibly un-advisable that appropriate standards for all the above items can be developed at the same time. We therefore envisage an incremental process whereby basic standards are established first and a more comprehensive set of standards is formulated later. We would expect these standards to be reviewed on an on-going basis by the organisation of the Chief Information Officer (CIO) which the Commission believes should be established as a matter of urgency (for more detail on this proposed organisation, see Section 6.3.3.1).

6.2.5.3 The Basic Standards

The Commission therefore proposes that a basic set of standards should be defined that would begin the process of rationalizing technology choices.

The guiding principles in defining technology standards should be:

To maximise application inter-operation and integration;
To leverage economies of scale;
To rationalise the skill sets needed to provide operational effectiveness;
To facilitate the migration of the current computing environment;
To obtain Value for Money.

The basic standards would include the following:

Network Protocols - to promote inter-operability. All applications on all networks should communicate using the same network protocols. The TCP/IP network protocol is becoming the de facto standard and the private sector has begun the implementation of the protocol as a standard.
Desktop Environment - this is in essence the "coalface" of the Government's information management infrastructure. The imperative of formal standards for the user environment is driven by the need to leverage the vast economies of scale that are possible in this area. Standards would include the users' hardware platforms, operating systems, personal productivity applications and user interfaces such as Windows and Internet browsers
Operating Systems - this basic component of any computing resource determines the environment that the machine can integrate into and inter-operate with. It determines the type and nature of the applications that are possible on that resource. It also determines the nature of the skills that are necessary to keep the environment operational.
Databases/Data Warehouses - the choice of the technology to store and manage data is critical to the ability to move, share and replicate information between and amongst different systems and users.
Transaction Processing - the ability to handle high volumes of business transactions is a necessary ingredient of large scale, enterprise-class systems. These systems must offer high levels of data integrity and transaction security in an environment that will need to be operational 24 hours a day and 365 days a year.
Security Standards - the need to provide authenticated access to applications and data to many different sets of users in a secure, safe manner is critically important. The standards should not only provide guidance on the technology choices but should determine the organisational policies and procedures that implement information security.
Middle-ware - this is the 'glue' that gives disparate systems the ability to communicate. Technology standards for middle-ware are necessary to provide the inter-operability of existing applications with the envisaged new systems. In brief, effective standards in this area are the critical component of any systems migration implementation
Data models - without agreement on key data models, data entered in one system will need to be re-keyed into another system, thus negating any electronic inter-operability create by the other standards described above. Amongst the first data objects to be agreed upon will be the unique identifier and data required by the base register (discussed in section 6.6.3 below). Other key data objects can be identified on the basis of what information public service agencies plan to share.
Document/Multimedia standards - although not as urgent as the other standards mentioned above, having common document and/or multimedia presentation standards ensures that information captured in one format is immediately accessible by those wanting to access it. The possibility of converting documents into HTML or other Internet friendly format needs to be explored.

It is unlikely that all these standards could be agreed in the two-three months period of the moratorium proposed above , but it is believed that at a very minimum, the networking standards, transaction processing standards, the unique identifier data model and HTML document standard could form the initial set of standards. Once the base set of standards have been agreed, the inter-ministerial proposed in Section 6.2.2.4 above could set a programme for defining an extended set of standards adequate to constitute an appropriate IT strategy for the public service.

6.2.5.4 IMST Vision

In order that the above IM, IS and IT strategies and standards are formulated within a coherent whole, the Commission proposes as a first step that government as a whole adopt an IMST vision. We believe that such a vision will only be adopted if it is agreed by those who will be working within its parameters. It is recommended that the Chief Information Officer (proposed above) as a matter of priority sets in place a process whereby the main government agencies can play a part in formulating the overall government vision.

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6.3 The macro-institutional context

6.3.1 Context

It was evident from the Commission's investigations that there currently exists a plethora of conflicting and overlapping public service institutions responsible for some or other aspect of IMST in South Africa. Not one of these agencies seems capable of taking responsibility for the overall strategy that should govern the use and development of IMST in the public service and in society at large.

Given the current move towards the decentralisation of government within nationally defined norms and standards, the Commission believes that what is ultimately required is an institutional mechanism that can ensure the coordination of an overall framework for IMST, while at the same maintaining departmental and provincial autonomy. The Commission advocates organisational autonomy within the boundaries of a common enabling framework of governance. This organisational autonomy is central to ensuring that senior managers, and especially IM managers, take responsibility for the systems under their control. However unless a common policy is established and maintained, the existing incompatibility of IMST in the public service will be exacerbated.

An additional issue is concerned with the institutional implications arising from the adoption of IMST. The application of IMST in the public service has not given rise to the same degree of organisational and operational transformation that has occurred in the private sector. There is little or no evidence from the presentations made to the Commission that IMST is seen as a means of transforming the way in which the public service undertakes its business.

6.3.2 Problems

6.3.2.1 Lack of Clear Roles and Responsibilities

Currently at least seven public service agencies have a role to play in IMST issues. These include:

The Department of Public Service and Administration (DPSA) which has responsibility for developing IMST policies for the public service as a whole;
The Public Service Commission (PSC) which has the responsibility of monitoring those policies;
The Department of State Expenditure (DoSE) which has the responsibility of supervising the main transversal systemsand managing the Central Computer Services (CCS);
The Department of Trade and Industry (DTI) which has a responsibility for promoting the IT industry;
The Department of Communications (DoC) which has been given the responsibility to act as secretariat for the development of an IMST strategy for the country with the ultimate responsibility for such a strategy being vested in the Deputy-President's Office (ODP);
The Department of Arts, Culture, Science and Technology (DACST) which has been charged with developing the technology foresight study of IMST in South Africa.

Given such a large number of agencies with IMST responsibilities, it is not surprising that there has been considerable confusion over roles and responsibilities.

6.3.2.2 Lack of Coordination

Although it is recognised by most government departments and agencies that central coordination is necessary to bring together a national IMST strategy for government, there is also not much clarity on the character and location of such coordination. In the absence of any agreed co-ordinating agency at present, the DPSA has formed an informal IT Executive Committee (ITEXCO) which seeks to coordinate the IMST actions of the public service. Despite the fact that public service agencies should be represented on the ITEXCO by their business head (normally the DG), current participation on the ITEXCO is mainly by those with IMST operational responsibilities. Many participants feel that it operates primarily therefore as a forum of IMST professionals rather than as a body which can ultimately steer IMST policies in the public service.

6.3.2.3 Proliferation of Systems

There is concern in some quarters that this lack of central coordination is encouraging a proliferation of systems acquired by different departments and provinces, which is leading in turn to even greater incompatibility and a waste of resources as public service agencies acquire unique systems tailored to their specific needs (a trend it has been argued that has also been encouraged by the suspension of the IT prescriptions in Chapter E of the PSSC, pending the production of new IMST guidelines). On the other, officials from the DPSA argue that too prescriptive a specification of IMST resources, as they believed occurred with Chapter E, leads to a situation where Departments and Provinces stop taking responsibility for their IT systems. In both these cases, the officials concerned believe in a minimum level of IMST coordination, but they differ in terms of its extent.

6.3.2.4 Application Usability and User Perceptions

User departments, especially in the provinces, have reported having considerable difficulty in using the transversal legacy systems operated by the DoSE (such as PERSAL, BAS and FMS), and in some cases they have chosen not to use them. Given the many problems with the transversal systems, future IMST strategy will need to consider when to adopt new systems technology. If, as State Expenditure seems to suggest, the new systems are standard commercially available packages rather than the current propriety systems, then issues such as integration and inter-operability should be more easily addressed.

6.3.2.5 Problems in Institutional Re-engineering

There is currently limited understanding in government of how IMST can be used to restructure its functions. The structures, functions and organisation of government seem to be largely determined by historical and political precedents rather than business operations. While it is unlikely that political imperatives will diminish, it is possible that, as the imperative to deliver becomes more critical, government may begin to have to adopt a more business-like approach to restructuring. This would effect both the internal restructuring of current individual departments, as well as the more ambitious attempt (recommended by the Commission) to restructure the service as a whole. It can be anticipated, however, that unless additional public service functions are created in the process, such an IT enabled re-engineering process is likely to reinforce the current pressures to downsize, with obvious and controversial implications in terms of job losses, union resistance and the like.

6.3.3 Precedents

The Commission examined and drew useful insights from a number of different cases, including New Zealand, Singapore, Malaysia, Malta, Canada, Australia and the United Kingdom. It found the Canadian and Australian concept of a Chief Information Officer (CIO) valuable because it ensures high-level coordination of IMST functions within a clear framework of whole-of-government objectives set by the office of the CIO. The Commission believes that the New Zealand functional model of coordination could be particularly useful because it recognises that IMST policies spans a series of public and private sector concerns. The Commission was also impressed with the Australian lead agency concept, which is based on the premise that, with the advent of new technologies and the devolution of operational authority, it is possible for information management functions to be decentralised.

6.3.3.1 The Chief Information Officer (CIO)

The CIO function was established by the Canadian Government in 1993 to provide government-wide leadership in the following areas:

Selecting and managing, in consultation with the user community, common IMST systems;
Identifying and implementing opportunities for departments in the same geographic location to share administrative services;
Directing and implementing the re-engineering of business process in the public service;
Establishing business context, strategic direction and standards for IMST development;
Ensuring that IMST services support the Government's overall objectives.

6.3.3.2 The Lead Agency Approach

The lead agency concept in Australia is based on the following principles:

Acceptance at agency head level that the role involves a whole-of-government responsibility and must be resourced appropriately;
Acting as a network entry point manager for information relating to the particular functions undertaken;
Monitoring the environment to maintain the service at world class standards;
Co-ordinating for the whole of the public service the development of legislation, standards and/or guidelines concerning that function;
Providing relevant assistance to other agencies; and
Coordinating with other public service organisations as necessary.

6.3.3.3 The Three Spheres of Government IMST Policy

Although most countries reviewed have created a system or agency for IMST coordination in the state and society, the model from New Zealand seems to incorporate features which will best suit South African circumstances. The New Zealand model has three different bodies, which advise on IMST:

An Inter-departmental Committee convened by the equivalent of the PSC comprising the six departments concerned with government use and procurement of IMST;
An IMST policy unit housed in the equivalent of DTI which is concerned with IMST issues arising from government's role as a social/economic policy maker; and,
An IT Advisory Group made up of ten leading private sector managers who advise the Government on the use of IT from a supplier and user perspective.

6.3.4 Options and Recommendations

6.3.4.1 Coordination of IMST Policy

The Commission favours a decentralised model of coordination, based on a combination of the New Zealand functional approach and the Australian lead agency concept. This is because such a model takes into consideration the fact that there are a number of different spheres of IMST- related policy. Firstly there is the Government user's perspective, then there is the perspective of those promoting industrial development, and finally there is the perspective of industry as a whole. The advantage of such a model is that it recognises that it is unlikely that one centre can coordinate all IMST related policy, and what is required instead is an inter-locking set of institutions which can draw upon each others' perspectives to formulate appropriate policy or advice to address their differing concerns.

This model is also not too different from the functional specialisation that already exists in the South African situation. While the DPSA has been given the responsibility for formulating IMST policy for government, the DoC and the DACST has a responsibility for wider IMST policy, and DTI has responsibility for IT industrial strategy. Although there is no logical problem with this functional differentiation, it is likely to perpetuate divergent policies in the absence of some overall coordination. There remains a need for a coordinating-agency mechanism, which will have the authority to align the diverse perspectives of these different functional perspectives with the needs and objectives of government.

6.3.4.2 Chief Information Officer

As a major step towards improving coordination, the Commission recommends that a Chief Information Officer be appointed to provide clear, strong leadership, to integrate information technology into government business processes, to make government a customer-driven enterprise, to define a vision and oversee implementation, to encourage and facilitate cooperation; and to serve as a catalyst for change. The Office of the Chief Information Officer will be expected in particular:

To develop a strategic vision for using information resources;
To develop strategies to improve information-resources management, leadership and authority across and within public service agencies in all spheres of government;
To set priorities for public service information resources management activities;
To develop implementation plans for, and monitor progress on information technology initiatives;
To work with provincial and local governments and industry to promote cooperation and information sharing;
To establish a continuous improvement plan and process to design, develop, and implement technology-enabled business applications government-wide;
To identify new opportunities for information resources sharing across public service agencies.

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It is proposed that the CIO be located in the Office of the President in order to ensure political support at the highest level. The CIO would be supported by a secretariat which would comprise a policy unit, a business process re-engineering unit, and a technology and standards unit.

6.3.4.3 Coordinating Committees

The CIO would communicate through two high level committees. The first, a Policy Committee, would comprise eight to ten members involving senior management of the key IMST policy departments (DPSA, State Expenditure, Communications, Trade and Industry, and Arts, Culture, Science and Technology) as well as at least two large user departments and at least one or two provinces. This committee could also involve about four senior executives from the private sector to provide outside perspective on public service IMST policy and ensure closer adherence to international best practice. The purpose of the Policy Committee would be to assist the CIO in formulating overall IMST policy for government.

The second committee, a Technology Forum, would comprise the senior IMST managers from the key user departments and provinces. This Forum would seek to operationalise the policy formulated by the Policy Committee. Although the Technology Forum would be subordinate to the Policy Committee since it would deal primarily with the technology and systems aspects of policy, feedback to the Policy Committee would be ensured through the CIO whose office would act as secretariat to both structures.

In the case of both structures, specific IMST projects would be allocated to lead agencies as required. The Commission therefore proposes that the lead agency concept be used within the framework of an overall policy coordinated by the CIO. Such a lead agency approach will allow different functional agencies to take ownership of those elements of IMST policy which most closely align with their overall mission. It is also favoured by the current public service budgeting system since lead agencies focus on programmes and projects rather than departments.

The CIO's office will primarily set the guidelines for the functioning of IMST in the public service and will have no direct responsibility of operating their information management systems and technology within these guidelines. The chief accounting officer of the individual agencies will need to certify on an annual basis that the agency's systems and technology conform to the guidelines. This compliance will be monitored by the Auditor-General's office. Only in exceptional circumstances, as in the case of the proposed procurement moratorium, will the CIO become directly involved with confirming the compatibility of IMST in the public service.

6.3.4.4 Re-engineering the South African Public Service

The Commission believes that the lead agency concept should not be promoted beyond the immediate requirements of actual cross-functional programmes. It however believes that it can be usefully combined with business process re-engineering when that is required by certain multi-functional programmes such as the National Crime Prevention Strategy. The Commission recognises that the manner in which structures, functions and organisations need to change as a result of departmental or provincial functions being rationalised is closely correlated to the manner in which these functions are themselves being transformed through the use of IMST. It may be that IMST is used as a means of promoting the right-sizing of the public service while at the same time enhancing the public service's capacity to deliver.

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6.4 Meeting national objectives

6.4.1 Context

The national objectives of the current Government have very little in common with the previous Government's mission. Thus the systems and applications built by the apartheid government currently in use may not necessarily meet the new, democratic objectives. The Commission is concerned that IMST has not as yet been used in a systematic manner by the public service to improve service delivery, public participation, government transparency or accountability.

6.4.1.1 The Prevailing Focus and Priorities

During its investigations, the Commission discovered that whilst a number of departments have used IMST to improve their functional performance, such improvements have not occurred in any systematic manner. The focus has been on automation of operating processes some of which are now clearly obsolete and inadequate for meeting the new objectives of the public service. For example, Home Affairs are intending to use IMST to make information available to the public. However, it is not clear to what extent its information desks will be linked to general government information sources. Ideally, one could expect the public to make use of such information desks not only to learn about services offered by government, but also to apply for those services through the same service point. For this to happen, there would need to be a far greater degree on integration and/or inter-operability of public service (and perhaps even private sector) data banks.

6.4.1.2 Resource and Functional Duplication

From the presentations of departments such as Land Affairs, Health, Constitutional Affairs, Education, Welfare and Labour, the Commission received the impression that these different departments are investing significant resources in developing information systems whose purpose is primarily designed to assist the departments' management team in their strategic planning functions. Although these and other departmental systems would seem to be collecting much of the same data, we did not get the impression that this information would or even could be shared amongst themselves, let alone by other spheres of government. Apart from the waste of resources arising from duplication of information systems, the question needs to be posed whether this information could not be shared by means of Internet-type technology. With the appropriate security mechanisms in place, the information collected by these different information systems could be shared amongst different spheres of government and with the general public where appropriate.

6.4.1.3 Public Access to Information

There is very little indication that IMST is being used to provide public direct access to government services. With the exception of a pilot project in the Northern Cape which seeks to place all the information relevant to citizens on a computer system which can then be accessed at available computer terminals, little progress seems to being made in making use of IT to facilitate improved service delivery, even though this is one of the fastest growing areas of public service IMST provision elsewhere in the world.

6.4.2 Problems: Old Systems - New Objectives

The majority of the main IMST applications currently operating within the public service were designed more than a decade ago, and were based on philosophies, policies, procedures and controls that are out of kilter with the new spirit of open, democratic, accountable and cost-effective governance. Not only are they inaccessible to the public, they are also virtually inaccessible to the managers who are meant to use them. Despite the huge investment made in IT over the years, the IMST capacity within the service is also very low.

6.4.3 Precedents

In the state of Washington in the USA, citizens are able to access twenty state agencies ranging from vehicle registration and licensing procedures to health services, employment and study opportunities and small business assistance. Although the system is not fully integrated, people can search for jobs on the state-wide database and then make use of this information to get priority at a state employment agency when applying for a job. Many other state agencies in the US and elsewhere have made information available to the public that originates from operational systems through the Internet. Messaging technologies have evolved that are used to pull information out of older, disparate systems, store it in data warehouses, massage and aggregate it, and publish it on Web sites.

6.4.4 Options and Recommendations for "Electronic Government"

Fiscal constraints and the resulting pressure on government budgets makes the integration of information technology into all facets of the public service vital to meeting the service demands of the public. Information technology must not be applied haphazardly or sporadically. It also must not be used simply to automate existing practices. Instead, information technology must be seen as the essential infrastructure for the government in the 21st century - a modernized electronic government which allow citizens broader and more timely access to information and services through efficient, customer- responsive processes, thereby creating a fundamental revision in the relationship between the Government and everyone served by it.

The implementation of electronic government is probably the best way to build capabilities that enable the public not only to access information but to conduct transactions with government departments. The Government already owns most of the infrastructure for the implementation of electronic government and the private sector has the technology products. The Commission therefore recommends that government give serious consideration to migrating to completely electronic communication within the next five years.

There are a number of issues (ethical as well as technological and financial) that will still need to be resolved, however, before this happens. For example, given the Government's objectives to promote greater improved delivery, public participation, transparency and accountability, it will need to determine to what extent information collected, collated and analysed on public service systems can be and should be accessed by the general public. Once an individual's personal information becomes accessible through such a system, this will obviously raise important implications for privacy, since unauthorised and/or discriminatory use of such information could interfere with a person's constitutional and human rights. The costs and technical requirements for such a migration will also need to be fully studied.

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6.5 Public service programme

6.5.1 Context

"Government must be accountable for results." This statement, voiced repeatedly by politicians and citizens, by the press and other watchdogs of government, is deceptive in its simplicity. It raises, but does not resolve, several fundamental questions: What are the desired "results" of government? How do we know whether government has achieved some intended result? What does it really mean to be accountable?

Since 1994 the concept of governmental accountability has taken on a new meaning. In this view, government demonstrates accountability when it shows its citizens: (1) what they are getting from the use of public funds in terms of products and services, (2) how these expenditures benefit their lives or the lives of those they care about, and (3) how efficiently and effectively the funds are used. This type of accountability holds government responsible not only for its actions, but also for the results and broader social impact of its actions.

6.5.2 Problems

There are three main and related problems with regard to IMST and its role in performance measurement and accountability in the public service. The first, as Chapter 2 demonstrates, relates to the inadequate nature of existing systems of performance measurement and management. Such systems guarantee little or no internal accountability, let alone external. The second relates to the limited use that has been made to date of IT in the operation of such systems. Current use of IT in the Public Service has not enabled it to maximise the benefits of IMST to improve efficiency and effectiveness. The third problem relates specifically to the lack of measurement of the performance of the IT asset itself. Little or no effort is currently being made to measure the return on IT investment, in terms of an assessment of the increase in personal and organisational productivity, improvement in service delivery times and the degree of public access to government information.

6.5.3 Precedents

The idea that information technology is critical to the operations of government has ample precedent in many countries in both the developed and developing classifications. The National Performance Review (NPR) is a United States' initiative to redesign and reform the operations of government and offers many insights into the use of IT to streamline functions, provide public access and re-engineer its processes to meet new objectives. The NPR seeks to:

Improve public access to government information and services
Implement nation-wide integrated Benefits Transfer system;
Provide all Federal payments through Electronic Funds Transfer systems
Address IT needs of the US Criminal Justice System

6.5.4 Recommendations and Options

6.5.4.1 For the Effective Measurement and Evaluation of IMST

To measure the effectiveness and performance of IMST systems it is necessary to define a starting point. The measuring criteria have to be developed and the baseline benchmarks set. These performance measurement criteria will need to be aligned with stated performance objectives. The criteria selected should be capable of measuring the following:

User satisfaction with the environment and applications;
Service delivery effort and times;
Degree of public access;
Degree to which applications meet specific departmental objectives.

6.5.4.2 For Performance Measurement and Management in General

Developing and implementing more effective systems of performance measurement and management, in which IMST is an integral component, represents a major commitment in time and money. To ensure that the benefits of such an investment are maximised, the Commission makes the following recommendations:

It is important that all applications should include features that enable the automated collection of performance statistics. This is so that public service employees are not burdened with the task of compiling these measurements. In brief, all systems should recognise service delivery parameters and automatically report on them.
Involvement and support from top management must be secured. In most of the research material studied by the Commission, leadership commitment to the development and use of performance measures was a critical element in the success of the performance measurement systems.
Performance measurement systems must be aligned with the organisation's strategic priorities and goals.
Employees (especially those on the front-line) and customers should be involved in the design of appropriate performance measures.
Effective forms of communication (top-down, bottom-up, and horizontal) must be set up, to ensure the necessary "ownership" vital to the successful establishment and maintenance of any effective performance measurement system

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6.6 Operational requirements

6.6.1 Context

The operational requirements of the public service IMST environment are staggeringly complex. This complexity, as we have heard from most if not all departments, is in part due to the complex nature of the constantly evolving technology itself but is mostly due to the fragmented, un-coordinated and wasteful way in which IMST systems have been implemented in the public service over time. These problems have been mentioned before but need to be raised again because they are directly responsible for increasing the cost of operations for all departments. All the major transverse systems have been developed by external, private sector companies and the larger share of the budget allocation goes towards these companies.

The major IT investment over the years by the Government is one that has borne little fruit in respect of effective information management or the creation of skilled resources. This situation is further complicated by the current debates regarding the idea of outsourcing IMST capability to the private sector. It has been argued in some quarters that, as government IMST operations are already largely outsourced, it would make sense to formalise the situation and bring the environment under the rules of the marketplace. The opposing view warns of the dangers of abdicating responsibility for the management of an information resource that is seen as increasingly critical to the public service.

The requirements for efficient and effective IMST operations also need to be seen against the background of the challenges brought on by the issue of the Year 2000 and the Open Democracy Bill.

6.6.2 Problems

Citizens and government workers contend with an increasingly complicated array of government agencies, organizations, processes, and forms. The existing service delivery system is largely based on hierarchical design structures developed in the previous political era. The result is slow, inefficient service that does not satisfy actual customer needs. The information needed for sound decision making and high-quality customer service is not coordinated across government agencies, thus increasing cost and time to provide services. In short, today's government structures, processes, and business practices, which were designed for a different era, cannot keep up with the existing types and volumes of user demands.

The Commission's investigation into current transaction systems indicates that in most cases the procedures are only partially automated. Some of the systems (such as the Provisioning Management System the Basic Accounting System) have not been properly deployed due to problems in their specification, design and/or implementation even after hundreds of millions of Rand have been spent on them. As a result, most public service agencies largely continue to operate manual systems. Not only is it much more costly and difficult to ensure the integrity and security of manual systems (or part manual part automated systems), but such systems make error-checking and reporting virtually impossible. Investigations by the Commission suggest that the current systems, therefore, do not provide the necessary controls for an adequate financial management system.

A well-designed and coordinated IMST system can clearly help to alleviate this situation. But a number of important problems and challenges will need to be addressed in the process. These include:

The Lack of an Integrated IMST Operational Strategy. This continues to be a major inhibitor. The operational autonomy of each government department, while laudable from a democratic perspective, has led to a "Tower of Babel" regarding technology standards and choices of environment.
The Impact of the Year 2000. Resolving the problems associated with the "millennium bug" is becoming an increasing concern for most large organisations, including the South African public service. It is estimated that the world will spend upwards of $600 Billion to meet the unavoidable imperative of resolving the Year 2000 issue. The Minister of Finance has recently estimated in response to a Parliamentary question that South Africa as a whole would need to spend about R21 Billion to implement the necessary system modifications before the dawning of the new millennium. Beyond the cost of making systems Year 2000 compliant, the Commission is extremely concerned that current government agencies have not done enough to address the problem timeously. The implication of not having compliant systems is that the business of government, and the country as a whole, is likely to begin collapsing on 1 January 2000 unless urgent steps are taken immediately. The Commission however failed to detect such a sense of urgency amongst those tasked with ensuring compliance.
The Maintenance Burden. The problems and issues surrounding the maintenance of equipment (both old and relatively new applications and systems) place a considerable strain on available resources. Applications such as PERSAL and PMS each consume upwards of R30 Million per year of operating budget and the largest expenditure goes into the salaries of the consultants and contractors who keep the systems running. Maintenance operations consume an inordinate proportion of available resources and yet contribute little to the advancement of either functionality or skills development.
Private Sector Influence. The strategic and technological decisions taken by the public service have been influenced by a few large private sector companies that have won tenders and contracts to develop large sections of the IT infrastructure and accompanying applications implementations. These companies are usually in competition with each other and they have implemented technologies that are incompatible with each other. Because they have operated in a completely un-coordinated and isolated manner, they have taken the public service IT infrastructure in whatever direction suited their business purposes at the time.
The Skills Factor. Operationally, skills cannot be transferred across departments or environments because each situation calls for vastly different skills and experience. This implies varying levels of resource duplication and reliance on outside, private sector entities to provide operating capabilities.
The Lack of Inter-operability and Integration. The fragmented implementation of public service applications and systems has contributed greatly to the lack of data and function sharing that characterises the bulk of existing IMST systems. While the inability to share data among applications across departments is a serious indictment, the negative impact of the lack of integration and inter-operability on skill resources are more fundamental and far-reaching.
The Lack of Common Data Standards. The lack of government-wide enterprise data models that are standard across all departments means that, even where physical connection between applications is possible, information cannot be readily shared and used in multiple applications.
The Lack of a Common Unique Identifier. Although the business of the government departments requires that they uniquely identify persons and corporations, the current systems allow a situation where persons and corporations can have multiple identities both within the same system and/or across systems. The obvious problem of failing to register a unique identifier in the public service information systems is that information gathered in one system is not easily available in another. Apart from the cost of data duplication and re-entry, this situation has added to the burgeoning crime and corruption problem threatening to undermine the new public service, including the problems associated with "ghost workers" and "ghost beneficiaries."
Challenges associated with the Draft Open Democracy Bill. Published in October 1997, the Bill is concerned primarily about public access to information held by governmental bodies but does go on to legislate on the ability to use and share that information with other bodies, public or private. The Bill presents two related challenges for IMST. The first is to set up IMST systems that can provide swift, inexpensive and effortless public access to the information managed by that system. The second is to establish effective safeguards against the abuse of such systems, including the invasion of privacy.

6.6.3 Precedents - The Swedish Unique Identifier

The Swedish system is based on the recent theories of object-oriented modelling, where identity (both personal and corporate) is understood as an object that has different significant properties depending on the needs of particular user departments. Each user department requires certain base information about each identity object (usually an unambiguous identification number) in addition to information specific to that agency. For instance, tax authorities may require an unambiguous identity plus information about income and tax status. The criminal justice system on the other hand also requires an unambiguous identity, but the data it identifies would be mainly concerned with information concerning criminal status. Depending on the legal limits of information sharing between functional departments, departments may co-operate on a wider information exchange (i.e., welfare may be interested in beneficiaries' income sources, while the revenue services might like to know who receives additional income).

The Swedish system has the added advantage that the data captured in the base register facilitates an individual's or corporation's relationship to the main public and private sector agencies with which they needed to interact. For instance, by filling in one change of address form at the post office, the individual or corporation could be sure that all state agencies and most major private sector agencies (banks, insurance companies) would update their records accordingly.

6.6.4 Options and Recommendations

The successful transformation of the IT infrastructure is key to the fulfilment of the overarching goal to move South Africa's population into the information age. Government IMST is so large that, if planned and managed properly, it could form a significant cornerstone for universal and open access to the information technology revolution. The Commission accordingly recommends the following options and proposals for consideration.

6.6.4.1 Investment Protection

The approach taken to transform the IMST capabilities of the public service must ensure that the large investment the state has made over the years is protected. While it may be ideal to scrap all applications and rebuild or re-source them through a "big bang" approach, the Commission feels that this would not be practical nor even feasible. What needs to happen is the careful migration and adaptation of the current infrastructure to the new, mission-aligned environment. Research into existing technologies indicates that there are "off-the- shelf" product offerings that will facilitate the migration of current systems to Internet type technology.

It is proposed that existing stable systems be "wrapped" with a new user interface which will allow new capabilities such as "decision support" to be tacked onto existing systems. For example, the FMS and PERSAL mainframe applications should be provided with a PC- based user interface which allows the user departments to both directly input data on-line and also to draw up reports using commonly available reporting packages. Communication to the mainframe could be facilitated through the use of Internet technology where direct connections are possible and mobile data capture facilities in remote rural offices. Since these user interfaces would be using standard applications they could be designed to adapt to any new financial management applications when such are deployed in the future.

6.6.4.2 The Technology Acquisition Process

The Government must also expedite and simplify how it acquires information technology. The market for computer hardware and software involves products for which the shelf life can be as short as a few months. In this environment, the Government needs aggressive, innovative purchasing methods. The traditional means and procedures of acquiring technology-based solutions should be replaced with a real-time, on-line electronic marketplace.

6.6.4.3 Resolution of the Year 2000 Issue

The Year 2000 problem has to be resolved by the Government as a matter of urgency. The Commission believes that emergency measures may now have to be undertaken to ensure that the systems are Year 2000 compliant. The global consensus is that it is now already too late to indulge in a "business as usual"' approach and the problem has to be tackled in major crisis mode. The convening of a 'Crisis 2000' project office (as opposed to a committee) should be undertaken as a matter of priority. The Crisis 2000 Office should have the following objectives:

The coordination of all Year 2000 initiatives;
The overall project management of ear 2000 projects;
The liaison with similar private sector initiatives and projects;
The responsibility for milestone tracking and reporting.

It has also been argued that existing systems vendors should be held liable for ensuring Year 2000 compliance since there exists no contractual understanding that the systems would not operate after 1999. As a matter of urgency, all existing vendors should be required to provide detailed (and independently audited) assurance that their systems are compliant, and if no assurances can be given, legal action should be instituted.

6.6.4.4 Implementation of Unique, Unambiguous Identifier

The Commission believes that the development of a unique, unambiguous identifier, along the lines of the Swedish model, is one of the fundamental building blocks of any future public service IT strategy. It is not possible to over-emphasise the critical role that such an identifier will play in enabling information sharing and access among different applications. The IMST implications of the Open Democracy Bill bring additional urgency to the quest for an identifier. We therefore strongly urge government to develop and implement such an identifier as a matter of urgency, paying due regard to the important issue of building in safeguards to protect confidentiality and privacy.

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6.7 Human resources development and training

6.7.1 Context

To achieve and sustain high performance organizations in the public service, personnel policies and human resources management systems must adopt a new way of thinking about the people who work in the organizations. People have been traditionally viewed as costs rather than assets, and have been appreciated for narrowly defined skills rather than for their individual uniqueness, competencies and potential. Chapter 2 of this report has highlighted a range of problems and challenges facing the public service with respect to human resources issues more generally. In many ways these problems are more glaring with respect to information technology, in part because IMST tended to be treated in the past as merely an operational tool understood only by relatively junior personnel somewhere in the bowels of the organisation. Fortunately, this sorry situation is now coming to an end, as a new breed of managers are beginning to have a sense of the larger organisational impact that information management capabilities bring forth.

6.7.2 Problems

Every year, increasing numbers of government workers are expected to use information technology skills and knowledge in performing their jobs. However, many members of the public service workforce lack sufficient training and background to use new technologies effectively, and many managers fail to realize the importance of IMST training.

Key challenges and problems that face the service in relation to IMST training and development include:

The Low Level of Investment in IMST Training. Government agencies rely on information technology and are increasingly dependent on the skills and capabilities of their workforce to enhance productivity and ensure quality service to the South African public. Yet compared with private industry, the National Government invests very little money or time in IMST training and retraining, and provides few incentives and opportunities for its employees to seek IMST education and training. Without this investment, the government workforce will be increasingly unable to keep pace with the rapid changes in technology and improved methods of customer service.
Training and the Procurement System. The National Government spends billions of Rand each year on IMST contracts and acquisitions. A majority of the contracts and acquisitions do not include training provisions in the initial design stages, thus placing a tremendous burden on the overall agency training budget.
The Lack of Executive and Senior Manager Awareness. Senior managers have not developed the kind of experience and expertise in IMST that they have in finance, human resources, and accounting. At a minimum, they need a basic knowledge of how to ensure the development and use of management information systems and other technological resources that meet their agency's needs.
Participation of Black People and Women in Public service IMST. In terms of the representation of Black people and women in IMST, this is an area where public service performance is still particularly dismal. Historically, they have found little opportunity to be significant participants in the IMST operations of the state.
The Lack of Career Development Opportunities. The inflexible rules that determine the position, post classification, remuneration and promotional opportunities for IT personnel are set up and implemented in a way that takes little account of the realities of the IMST skills marketplace. In the context of an increasing global demand for IMST skills, the persistence of these rules make it possible for a public service IMST professional to double and in some cases to triple their remuneration packages and enhance their career development opportunities by moving to a position in a private sector organisation, either in South Africa or overseas.
The Costs of Low Investment in IMST Skills Development. The costs of inadequate IT training and development are significant. In the worst-case scenario, people do not use their computers at all, and the organization's investment in hardware and software is wasted. In a less extreme circumstance, every time a user relies on a formal support function rather than performing IMST work on his or her own, the organization incurs significant overhead and salaried costs.

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6.7.3 Precedents

The costs of providing IMST training in through traditional methods have been a constraining factor in both private and public institutions. To meet this challenge, initiatives in the West and especially the USA are increasingly focused on providing training through the Web part of the Internet. The convergence of telecommunications, telephony, and computing has made possible this evolution from the traditional educational model to a new learner-centred model. The state of New York, for example, has begun investigating the possibilities of using the Web as a mechanism to provide in-service training videos for its employees. Under such a plan, employees would be able to access training films and other course materials whenever their schedules allowed. The use of these new forms of in-service training and development clearly needs to be seriously considered by the South African public service, not only for the training and retraining in IMST skills but in a much wider range of skills development.

6.7.4 Options and Recommendations

6.7.4.1 Principles Underpinning Future IMST Training and Development

The Commission believes that the future development of IMST skills training and capacity building in the public service should be governed by the following key principles:

Public service partnerships with private sector IMST training providers;
A strong link between training and individual career development;
Internationally recognised accreditation;
Alignment with the National Qualifications Framework (NQF);
Open access.

6.7.4.2 The Need for a Skills Development Plan

The Commission proposes that an emergency skills development programme of education and training be initiated to train IT personnel in the public service. This will have two overlapping strands. The first will be modeled on the SYSTEM approach to science and technology training. The SYSTEM method, which has targeted matriculants and "second chance" students, has already produced 900 graduates ready for a science and technology career. The Commission proposes that the SYSTEM programme should be boosted to ensure that their current throughput of 1 200 graduates be increased to the targeted 10 000 originally envisaged by the programme designers. The second strand of the skills development plan is that SYSTEM graduates and other qualified science and technology matriculants be drawn into a four year internship programme. The internship programme, which would alternate education with practical training should provide an accelerated four year qualification equivalent to current tertiary qualifications.

It is proposed that the public service consider training between 500 and 1000 interns annually depending on the availability of suitable entry candidates. The state will benefit by having a flow of relatively cheap IT personnel for a four year period with the possibility that some will remain in the public service. Given that the current turnover of IT personnel is 18 to 24 months, this will increase the retention rate within the state sector. In addition, the IMST industry in South Africa will also benefit from there being a larger pool of graduates. It is proposed that to ensure suitable exit standards, and perhaps even to share costs of the internship programme, the private sector should be involved in the design and funding of training and practice modules.

6.7.4.3 Public Service Executive IMST Awareness Programme

There is an urgent need to address IMST competency at the executive and senior management levels. Including IMST competency in an executive awareness programme will emphasize IMST as an integral part of the continuous and comprehensive learning organisation. In order to provide basic knowledge, courses should be organised to provide insight on how to integrate technology into the workplace, to use new technology to manage and improve programme effectiveness, and to explain the impact of technological changes on the organization.

6.7.4.4 The Participation of Black People and Women in Public service IMST

The Commission recommends that the public service should seek to redress the lack of participation by Black people and women in this important aspect of their operations. A focused attempt should be made to enable the entry and progress of young Black people and women in the IMST sections of government departments. The "Marshall Plan" outlined above should help in this regard. In addition it is proposed that a funded, focused programme be established, directed at the single purpose of bringing more Black people and women into IMST.

6.7.4.5 New Forms of Education and Training for IMST

Examples from overseas have highlighted the benefits to be gained by the use of the electronic media in both formal education and training, as well as in-service programmes (not only for IT staff, but also for other employees and indeed the public). These include:

Lower cost to deliver courses and training materials to students and staff. Courses that would otherwise be difficult to offer at some locations because of limited enrolment or lack of faculty in a specialized area are now possible;
Greater opportunity for collaboration and sharing. The Web increases opportunities for collaborative work and sharing of information, ideas, and courses among different locations;
Greater access to courses that can be taken any time, any place. Such courses can be delivered to a learner at a campus, at the office, or at home;
Greater access to research and reference services.

The quicker the public service workforce embraces the possibilities of information technology, the sooner the initiatives of electronic government can become a reality benefiting the public. By re-engineering through information technology, the public service could provide the leadership, vision, and commitment to bring government into the information age.

6.7.4.6 Career Development

If the IMST divisions in the various government departments are to consistently achieve high performance, a number of human resource issues which are underlying prerequisites for success must be addressed. These include:

Recruitment: The best and brightest candidates must be recruited into public service;
Employee Skills/Abilities: Employees must be motivated, efficient, and creative. They must be proficient in a wide range of skills and continuously add new competencies;
Remuneration: Must be comparable to the private sector;
Accountability: Public workers must be held accountable for results. Rewards and promotions must go to the best. Meanwhile poor performers need to be supported to improve and address deficiencies;
Job Satisfaction: Jobs must be enriched. A productive work environment values and supports teamwork, collaboration, and active participation by workers;
Workforce Diversity: The workforce and work rules must be structured to fully utilize the skills and capabilities of all employees;
Quality of Work Life: Quality of work life issues must be addressed through support systems that meet the changing needs of employees and their families.

It may become necessary to implement changes in the public service career development process to recognise the basic differences between the more "normal" public service employee and the IMST professionals. The current high market demand for IMST skills mandate an approach that may seem radical and unfair to other types of government employee. If the public service intends to develop and retain any significant pool of skilled IMST resources, it is imperative that it be enabled to compete on an equal basis with the general IMST skills marketplace.

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6.8 Financial and budgetary requirements

6.8.1 Context

6.8.1.1 Maintenance of Legacy Systems

Many of the problems described above are ultimately linked to the financial and budgetary constraints facing the public service. Currently the bulk of the funds allocated to IMST are being used to keep existing legacy systems operational, since new public service managers often seem to believe there are no funds to adopt new systems. Where new systems are being commissioned, these are often supplementary to legacy systems that continue to carry the burden of public service transactions.

6.8.1.2 Procurement Process

Where new systems are being acquired, they often go through an unwieldy process of procurement that seems to have little ultimate effect on the quality of system procured. At the moment there also seems to be a mad rush by departments and provinces to acquire systems which may address their immediate service delivery requirements but which have no relation to other systems being procured elsewhere. Not only are there no basic standards agreed to, but also in many cases, different departments are acquiring very similar but not necessarily compatible systems. All these problems exacerbate the budgetary constraints currently being experienced and could add up to mounting financial problems in the future.

6.8.1.3 The National Imperative

In proposing changes in the use of IMST in the public service, the Commission is sensitive to these constraints but is at the same time aware that the ultimate cost to the nation of not having the appropriate IT systems may be far greater than any immediate short-term savings may imply. The Commission believes that a set of basic standards should be agreed to prior to the acquisition of further large-scale systems, regardless of the short-term delays that may arise. It also believes that new procurement models for IMST should be explored in order that the procurement, operating and system development risks and rewards can be equitably shared between the public and private sectors.

6.8.2 Problems

Inadequate Funding of IMST. Although there are no absolutely reliable figures on total IMST costs in the public service (itself a cause for concern), it is estimated that such costs are currently in the region of R2-2.5 billion annually. This represents approximately 1.5% of the total budget. By contrast the private sector in South Africa spends about 3-5% of their total budgets on IMST.
Value for Money. It is also doubtful if the public service is getting value for money from its current expenditure. For example, approximately 34% of IMST spending is taken up by consultants' fees. It is estimated that if such services were to be performed internally or by a parastatal such as INFOPLAN, between 6% and 10% of overall costs could be saved.
Procurement Problems. While the commission would not advocate the abandonment of appropriate procurement procedures, there is no doubt from the evidence presented by departments and provinces that current policies are unnecessarily tedious and overly bureaucratic. There is also little evidence that they have provided the best possible IT solutions. In this context the Commission notes with concern that the Green Paper on Public Service Procurement had virtually nothing to say about the unique problems of IS and IT procurement. It is proposed that this be addressed in the forthcoming White Paper.
· Lack of Tender Board Expertise. Many departments and provinces complained about the complexities and delays involved in the tendering process. Representatives from the state Tender Board, however, pointed out that most delays experienced with the tender process arose because departments did not understand or follow the correct procedures. This argument was acknowledged by a number of departments, who nevertheless believed that tender regulations should be revised and made clearer in order to expedite the acquisition of goods or services.
Life Cycle Costing and its Application.There was little evidence that life-cycle costing is applied (through systems such as the System Development Life Cycle for example). This would seem to suggest that current systems may not be cost effective if their operating and maintenance costs are taken into account.

6.8.3 Precedents

Australia has transformed its procurement system on the belief that freeing good people to make smart business decisions will generate huge administrative and contract cost savings. The evidence suggest that this has worked well. The concept of letting managers get value for money, make smart business decisions and be accountable for results still remains largely foreign, however, in the South African public service.

In the procurement and operation of state assets, the Canadian Government has made significant

advances promoting what is called the Alternative Service Delivery (ASD) model. Unlike the Private Finance Initiative (PFI) in UK which tried to subject every asset or service acquisition to a privatisation test, ASD posits a range of service delivery options involving s spectrum of public, private and non-governmental agencies. The ASD approach seeks to encourage new relationships in service delivery without the government abdicating its ultimate responsibility for governance.

The mechanisms developed for ASD include the following:

Government has no responsibility for outcomes	Government has joint responsibility for outcomes	Government remains responsible for outcomes
devolution recognition privatisation franchising licensing self-regulation de-regulation	separate service agency special purpose body community corporations mixed enterprise joint venture regulated monopoly regulatory agency community board collaborative partnership external purchase of service joint financing	commercialisation cost recovery internal delegation internal partnership special operating agency single-window service co-location community offices common services merging systems electronic delivery self-service

It is not the Commission's intention to suggest that all these mechanisms be considered as procurement options for IT assets and services, but rather to indicate that there may be many options beyond direct delivery, outsourcing and privatisation. In the next section, some of these alternatives will be considered.

6.8.4 Options and Recommendations

6.8.4.1 Mission-Driven, Results Oriented Budgeting

Reform of the financing and budgeting of IMST must be located within the context of broader processes of budgetary transformation, along the lines suggested in Chapter 3 of this report. The new approach to budgeting will need to be mission-driven, and capable of linking purpose, resources and results to promote a more effective system of service delivery that combines quality with value for money. Such an approach should encourage long-term thinking and help political leaders and senior managers to make better choices and set effective but realistic priorities. It should also help to remove needless constraints on managers' use of resources, to encourage innovation and provide positive incentives to manage effectively, to cut wasteful spending, and to convert accountability for spending money to accountability for achieving results.

6.8.4.2 Transforming Procurement

The Commission believes that there is an urgent need for fundamental procurement reform. In some cases, the solutions require legislation. But most importantly, they require a new direction and model for organisational control, one that depends on empowered managers and employees held accountable primarily for external results, not internal rules. This will involve freeing managers and employees from excessive laws, all accompanying regulations, and internal agency barriers that stifle innovative customer service. The government procurement system needs to be recognised as an administrative process that balances the cost of the system to taxpayers and vendors, the line manager's needs, and the nation's socio-economic goals. The law's main role should be to set public policy goals and sensibly protect the system against fraud.

The Commission also believes that the new system for procurement must provide value for money and be driven by customer service rather than the needs of the bureaucracy. Public service managers need responsive, efficient, and innovative procurement services delivered by procurement officers with whom they can develop a tested, long-term relationship. Together, line managers and procurement officers must shift from a system of procurement focusing on regulation for the sake of regulation to a system balancing value, price, fairness and the empowerment of SMMEs to produce a truly cost-effective system.

In considering options for the procurement of IT assets and/or services, the Commission recommends that a number of options be considered, including:

The Alternative Service Delivery (ASD) approach outlined above, where the risks for development, ownership, operation and upgrading are shared by those public and private sector agencies best suited to carry that risk. If this approach is used in conjunction with the life-cycle costing of alternative bids, it should help balance the risks and ultimately the costs faced by the public service. One South African example of an ASD type IMST procurement approach is the subsidy management system used by the Department of Housing. The subsidy management system was developed by the Council for Scientific and Industrial Research (CSIR) and its private sector partners in a relationship where the partnership carried the bulk of the development risk. Housing was only required to pay for a working system. The partnership also undertook to train SMMEs who would thereafter takeover the support functions.
The Request for Solutions (RFS) approach, recently pioneered by the Gauteng Corporate Informatics Department. In essence the method focuses on defining user needs internally, and then relying on vendors to come up with appropriate solutions. This attitude is in line with the belief, endorsed by the Commission, that the risks and rewards of systems development, operation and maintenance should be carried by the parties best qualified to accept them.

Finally, the Commission believes, as stressed earlier in this chapter, that the interests of the country would be served by a short-term moratorium on IMST procurement, while agreement is reached on the basic features of all new systems. We propose that an inter-ministerial task team be established by the President with a short-term deadline to agree on the basic standards for a new policy. This should be led by the Minister of Finance and involve all the key IMST ministries and departments. In order to ensure cooperation and buy-in from line function departments and provinces, a number of focus groups should be convened as part of this exercise.

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6.9 Summary of main recommendations

In this chapter of the report, the Commission has identified many problems and challenges facing IMST and has made a large number of recommendations for overcoming them. In doing so, it has relied both on the expertise of public servant currently engaged in addressing the problems and on international precedents. It is our belief that these recommendations will assist those in the public service who are already active in trying to address the problems identified. The following section provides a brief and by no means exhaustive summary of the key recommendations made in the report.

6.9.1 Procurement Moratorium

The most immediate recommendation is a short-term (two-three month) procurement moratorium on all large (above R5 million) information management systems and technology until some basic standards are agreed to facilitate future data exchange and inter-operability. It is proposed that the process to agree upon the basic standards be driven by an inter-ministerial task team and involve all affected departments and the provinces through focus group and working group structures.

6.9.2 Basic Building Blocks

The procurement moratorium would be designed to create the political will to get the public service to agree on some basic standards. The most immediate need would be for standards required for exchange of information between different systems. The unique identifier plays a crucial role in that respect, but network standards will also be required. Common formats for electronic exchange of information between government and private institutions, companies as well as the public, should also be established based on Internet related techniques.

6.9.3 Business, Information, Systems and Technology Architecture

The short-term procurement moratorium would merely supply the basic building blocks for a more comprehensive set of standards. Ultimately however, there would be a need for a more holistic business, information, systems and technology architecture for the public service. Such an architecture could be derived from the current IT Business Architecture and/or subsequent projects.

6.9.4 National IMST Strategy and Implementation Plan

The Commission proposes that the above projects be consolidated into a national information management strategy, information systems strategies and an information technology strategy for the public service. Such a strategy would of course need to be in line with any national information society strategy for the nation as a whole.

6.9.5 Chief Information Officer

It is proposed that a Chief Information Officer (CIO) be located in the Office of the President to coordinate all public service IMST initiatives. The CIO would have a support staff and would interact with the rest of government and the private sector through two new committees which would also need to be established. These are:

A Policy Committee, comprising senior managers of those departments and/or provinces engaged in general IMST policy as well as including a number of some private sector managers;
A Technology Forum, comprising the IMST Managers from the key user departments and provinces.

6.9.6 Lead Agency Concept

In developing the above standards, architectures and strategies, the Commission proposes the acceptance and introduction of the lead agency concept whereby a particular state agency would be given primary responsibility to coordinate a whole-of-government IMST initiative in relation to a specific set of IMST functions in conjunction with other participating departments. In order to ensure inter-agency cooperation, personnel and resources would need to be shared on a programme and/or project basis, but ultimately the Minister and Senior Management responsible for the lead agency would be held accountable for performance.

6.9.7 Business Process Re-engineering

Coupled with the lead agency concept, which is largely a short-term measure, the Commission proposes that in the medium to longer term the current functional differentiation of the public service be address on the basis of business process re-engineering. It is proposed that the current re-engineering arising from National Crime Prevention Strategy serves as a model for such a business transformation of the public service.

6.9.8 Skills Development Plan

In order to address the critical skills shortage in IMST in the public service, the Commission proposes that a systematic skills development plan be designed and implemented to train new entrants to the information management and technology field. This will entail in particular a new four year internship programme which would lead to an accelerated but nevertheless equivalent qualification to those currently offered by tertiary institutions. Although this programme would be open to all, special emphasis should be given to seeking interns from historically disadvantaged communities to ensure that representivity is addressed.

6.9.9 Electronic Government

The implementation of electronic government is probably the best way to build capabilities that enable the public not only to access information but to conduct transactions with government departments. The Commission therefore recommends that government give serious consideration to migrating to completely electronic communication within the next five years.

6.9.10 Public/Private Risk and Reward Sharing

The Commission proposes that new procurement models be used in the development, operation, maintenance and upgrading of information management system and technology. It suggests that the 'alternative service delivery' models and the 'request for solution method' be explored to ensure that risks and rewards are appropriately shared between the public and private sectors.

6.9.11 'Crisis 2000' Project Office

The Commission believes that emergency measures have to be undertaken immediately to ensure that the systems are Year 2000 compliant. A 'Crisis 2000' project office should be convened immediately. It would coordinate and project manage all the Year 2000 initiatives in the public service in liaison with similar private sector initiatives and projects. It would also undertake responsibility for milestone tracking and reporting to the Office of the President on these initiatives.

Chapter 7: Conclusions and recommendations

Conclusion
Recommendations

7.1 Conclusion

In this report the Commission has tried to re-think fundamentally the role and functions of the public service, and to set out a framework for transformation in which the cornerstones of social need, capacity and cost have been at the centre of our thinking. These are rigorous constraints in a country where resources are sorely stretched, social need is infinite and capacity severely constrained. It is with services in mind that we have approached the four central themes of this report: transforming the structures and functions of government; revitalising human resources management and development; stressing the central significance of Information Technology; and building effective systems for financial planning and budgeting. The latter in particular is essential for the full realisation of our priorities, if the democratic transformation of the public service and the equitable provision of services for all South Africans is to be achieved. Collectively the four themes create the parameters for change and the prerequisites for the development of a culture of good governance.

We have adopted an approach that is frank, bold and, we hope, fair and constructive. We have not hesitated to commend departments and ministries for effective and efficient delivery or to reject outcomes that we have found to be ineffective, expensive and shoddy. Wherever possible we have adopted recommendations to improve the effectiveness of governance and to generate change. The Commission's brief has been to set a framework for transformation in a public service that is in a continuous process of reform and change; sometimes occurring incrementally and at others as expeditiously as our resources, skill and commitment will allow. The aim is to achieve a public service which now and more so in the future will bear the high standard of professional ethics, impartiality, effectiveness and transparency that the Constitution demands of it. That the service should be accountable, responsive to the needs of the people and development-oriented has been intrinsic to our thinking.

The task of transforming the public service from an institution of regulation and control to one that is people-centred, efficient, coherent and transparent is a daunting one for any government, least of all one without a democratic heritage. The desire to succeed in this respect, to surmount the over-arching impediments to change, both human and financial, and to subject the new democratic Government, so early in its life, to the independent and rigorous scrutiny of this Commission is a measure of the Government's determination to transform the country's institutions at the core "and to get it right" from the Office of the President down to every organ and agency of government at national, provincial and local levels. The challenge of our task and the immensity of our responsibilities were offset by our awareness of, and faith in, the commitment and capacity of the appointed and elected officials of the South African Government to give effect to our recommendations.

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7.2 Recommendations

The following is a summary of the main recommendations made by the Commission in relation to the four key themes around which this report has been structured, namely structures and functions, human resources management, budgeting and finance, and information management, systems and technology. These recommendations, and others, are covered in more detail in the Overview and subsequent chapters of the report, as are the issues, problems and challenges which they are designed to address.

7.2.1 Transforming the Structure and Functions of Governance

7.2.1.1 The Need for a Radical Change

It is the view of the Commission that the system of governance in the new Republic of South Africa is in a number of crucial respects not working well at this stage of the transition process. Too little progress has been made in remedying the inequalities and inefficiencies of the past. The delivery of public services, their costs and quality, leave much to be desired. Given this, we recommend that the role and functions of the public services have to be rethought fundamentally.
The elements to be covered by such change include:
- Creating a professional public service, under professional leadership and within a professional ethos.
- Setting high but feasible standards of public service performance.
- Clarifying the political/administrative interface, with a professional protocol to uphold it.
- Clarifying the national vision and strategic direction.
- Providing effective leadership, management and strategic planning.
- Instituting sound management of human and financial resources.
- Creating organisational structures appropriate to new functions.
- Establishing an appropriate communication strategy internally and with clients of government.
- Maintaining effective monitoring and evaluation systems.

7.2.1.2 The Need for a National Vision

There is a pressing need in particular from government for the formulation and transmission of a coherent national vision for development to guide the processes of transformation, reconstruction and development, nation building, democratic consolidation and community empowerment. Currently such a vision is lacking.

7.2.1.3 Rightsizing the Public Service

The Commission believes that there is no justification for the massive number of public officials, given the resources available and the priorities of government. Furthermore, the inability of the state to compete with private sector salaries may suggest the need for a smaller, professional, highly skilled and well-paid public service. In short, the corner-stone of the new public service should be social need, capacity, and cost.
Whilst the Commission accepts, therefore, that there is an urgent need for rightsizing in the public sector, located within the macro-economic constraints established by GEAR, we feel that this should nevertheless be driven primarily by the need to improve the efficiency and effectiveness of service delivery.
For this to take place, however, there will need to be organisational audits in each department, together with organisational redesign to determine optimal staff complements. Heads of departments would have to use staff more productively, prioritise delivery programmes and produce a hierarchy of needs to effect an appropriate annual reduction of personnel over the next three years, commencing with the retrenchment of those supernumerary personnel who cannot usefully be redeployed or absorbed in the staffing establishment.
For progress to be made on rightsizing, the current moratorium on compulsory retrenchments will need to be re-negotiated with the employees organisations in the Bargaining Chamber.
Rightsizing initiatives will need to be accurately costed and the costing process will need to take alternative service delivery options (such as outsourcing and public-private/public-community partnerships) into consideration. Such initiatives will also need to be accompanied by programmes to create alternative employment opportunities. This will be essential if the process is to be acceptable to the unions and the public.
The voluntary severance package scheme has clearly failed to meet its intended objectives, and should be abandoned. Political and administrative heads of departments must be fully briefed about the conditions governing future severance schemes.

7.2.1.4 Strengthening Direction and Coordination at the Centre of Government

In the view of the Commission the principal objectives of reform are (i) to formulate policies which meet the needs of the people, and which are well-founded on relevant data, coherent and well co-ordinated, fully and prudently costed to ensure value for money, and prioritized within available resources; and (ii) to facilitate the efficient and effective implementation of such policies, and to ensure that they are regularly monitored and reviewed.
The Commission is firmly of the opinion that these objectives cannot be fully realised without significant change at the apex and core of government. National departments and provincial administrations will not be able to achieve these objectives if they continue to function as at present. By themselves they do not have the capability or authority to remedy the way government works.
The Commission believes, therefore, that the transformation and development of the governance of South Africa requires a radical re-appraisal of the functions, structures, personnel and management of the Office of President, taken together with the Office of the Deputy President, to ensure greater direction and co-ordination in government policy at all levels.
In addition to the private office and a number of existing units, the Commission recommends that the Office of the President should be restructured to include:
- An Office of the Cabinet Secretariat (OCS), to co-ordinate Cabinet policy.
- An Office of Public Management (OPM), under the oversight of a minister, which would take on the functions of the DPSA and incorporate the existing offices on the Status of Women and Persons with Disabilities.
- An Organisational Review Agency (ORA), which would be located within the Office of Public Management and would carry out the on-going process of evaluating and re-configuring the structural organs of government.
- An Office of the Public Service Commission (OPSC), which would replace the current PSC, whilst retaining its independence and continuing to carry out the functions laid down by the Constitution.
- The Coordination and Implementation Unit (CIU), which would be transferred from the Office of the Deputy President and which might eventually be incorporated into the Cabinet Secretariat.
- A Co-ordinating Agency for Inter-Governmental Relations, which would deal with inter-sectoral and inter-governmental relations but not local government. This body would take over the coordinating functions currently carried out by the Department for Constitutional Development.
- An Information Management and Systems Agency, to co-ordinate all public service IMST initiatives.
In the view of the Commission, the idea needs to be re-inforced that the public service is essentially a unitary entity, operating at both national and provincial levels. Accordingly, the Office of the President should be restructured to avoid overlap and potential conflict. In our view, there should be one DG for the offices of the President and Deputy President combined, and a smaller office for the Deputy President. We recommend in particular that machinery is put into motion to assess whether or not senior personnel in the Presidency have been appropriately deployed and that, where necessary, appropriate corrective measures for the deployment and re-deployment of staff be adopted as a matter of urgency.
The thrust of all the PRC's task team reports is that there is likely to be increasing delegation from the DPSA to the departments and provinces. Once the major elements of transformation have been broadly achieved, therefore, and the public service is more "stabilised" at national and provincial levels, the Commission believes that there will no longer be a continuing need for a large department of public service and administration. We therefore recommend that a leaner Office of Public Management (OPM), strategically located in the Office of the Presidency, and under the oversight of a minister, would be more appropriate and would provide the Office with the necessary authority to engage more effectively with other departments and with the provinces.
As indicated above, the Commission recommends that a more appropriate location for the offices on the Status of Women and Disabled Persons would be within the proposed Office of Public Management, where their contributions to policy could be more effectively integrated into the overall strategic planning processes.
Our recommendation for the restructuring of the Public Service Commission is on the grounds of efficiency and effectiveness. In the view of the Commission, a less elaborate and more professionally managed body, led by no more than three Commissioners (rather than the fourteen laid down in the Constitution), would be more suitable for carrying out most of the monitoring and standards preserving functions outlined in the Constitution. Such a body would have a limited staff, supplemented according to need, and would report the findings to the President, as well as to parliament (particularly through the relevant parliamentary portfolio committees).
We recommend the creation of a stronger portfolio for the Secretary to the Cabinet as Head of the Public Service. An important role for this person would be to coordinate Cabinet inputs, follow up decisions taken, and ensure that policy is being implemented and communicated effectively.

7.2.1.5 Building More Effective Inter-Governmental Relations

Both national departments and the provinces repeatedly pointed to the fact that weaknesses in the structures and practices of inter-governmental relations (IGR) led to poor coordination within and between different departments and spheres of government, creating an incapacity to implement national programmes and a consequent failure to deliver basic services.
In view of this, the Commission recommends that the roles and responsibilities of the Inter-Governmental Forum be reviewed and consideration be given to its restructuring or, alternatively, to its abolition. In particular, there will need to be a far closer working relationship between the IGF (if this body is to be retained and we believe it should) and MINMECs in particular and with other IGR structures in general. The present poor information flows and lack of communication between IGR structures often results in contradictory or duplicatory decision making.
We also recommend that the role of the Department of Constitutional Development in inter-governmental relations be taken over by the proposed Agency for IGR in the President's Office (see above). This is to enhance the status of IGR by giving this agency the necessary authority and political backing to enable it to more effectively oversee, monitor and intervene where necessary in inter-governmental interactions.
We recommend an inquiry into the functions, needs and relations between the three spheres of government as a matter of urgency. We also recommend the establishment of a Ministry of Local Government (see below).
We recommend that serious consideration should be given to the asymmetrical devolution of functions (i.e. the devolution of some of the functions to provinces and municipalities where there is capacity to undertake services rather than delaying such devolution until there is capacity overall). This could go some way to redress problems of capacity without violating the provisions of the Constitution.

7.2.1.6 Re-Configuring National Ministries and Departments

The Commission recommends the following rationalisation to enhance efficiency, effectiveness and more effective inter-departmental coordination.
In the short to medium-term, the Commission proposes the disestablishment in their present form of the following ministries and agencies, and their associated departments:
- The Ministry of Arts, Culture, Science and Technology;
- The Ministry of Correctional Services;
- The Ministry of Education;
- The Ministry of Justice;
- The Ministry of Provincial Affairs and Constitutional Development;
- The Ministry of Public Enterprises;
- The Ministry for the Public Service and Administration.
- The Ministry for Sports and Recreation;
- The Public Service Commission as presently constituted under the 1996 Constitution.
The Commission proposes the replacement of these ministries and agencies by the following re-configurations:
- A new Ministry of Higher Education and Technology;
- A new Ministry of Education and Culture (in which Sport and Recreation would be a Directorate);
- A new Ministry of Justice and Rehabilitation (the latter taking over the functions of Correctional Services);
- A new Ministry for Local Government;
- The re-configuration of the Department of Constitutional Development whereby all its current functions other than local government are located in the Office of the President;
- The establishment of the Office of Public Management in the Office of the President to take over many of the functions currently carried out by the DPSA;
- The location of a restructured Public Service Commission an independent commission of 3 people in the Office of the President;
- The establishment of a number of new central executive agencies in the Office of the President, in particular for Inter-Governmental Relations and Information Managemnt, Systems and Technology.
The Commission believes that a number of ministries and departments would logically form coherent and viable combinations. Such combinations include:
- Water Affairs, Forestry and Agriculture;
- Land Affairs and Environment;
- Trade and Industry and Tourism;
- Finance and State Expenditure.
Given the current lack of effective coordination between the departments of Foreign Affairs and Trade and Industry, the Commission also firmly believes that trade officials in embassies should report to the relevant diplomatic representative and not to the DTI. We therefore recommend that the international trade function in DTI should be phased into the Department of Foreign Affairs; and that the two departments establish a task team to deal with the details of this transfer, especially in respect of the reporting lines.
The Commission recommends that, in the case of departments such as Safety and Security, Justice, Correctional Services and Education, serious consideration be given to a major re-engineering and rationalisation at senior levels, as an urgent imperative. The President and responsible ministers are urged to reassess the suitability or otherwise of some of the top echelons of their public managers.
In view of the singular importance of local government and its inter-connectedness with the two other spheres of government, the Commission recommends that a separate Ministry for Local Government be established to replace the current Ministry of Provincial Affairs and Constitutional Development. In so far as the residual duties of the Department of Constitutional Development (DCD) regarding inter-governmental relations (IGR) are concerned, the Commission recommends that these be undertaken by a directorate in the Office of the President where the necessary authority for its various interventions across departments and provinces will be greater.
The Commission recommends that the Ministry and Department of Public Enterprises be phased-out as soon as possible, and that the six major State Enterprises for which they currently have oversight (Transnet, Eskom, Denel, Safcol, Alexkor and Aventura) be transferred to the appropriate line departments. It is recommended that the remaining enterprises be transferred to the Department of Trade and Industry, or other appropriate line ministries, subject to review by the proposed Organisational Review Agency. Financial accountability and oversight of all state enterprises should lie with the Department of Finance.
The Commission recommends that the Department of Public Works (DPW) be restructured, in particular by out-sourcing those functions that it no longer can successfully supply. However, the coordination role of the management of assets must remain with the DPW, which should restructure to the extent of allowing autonomy without losing the crucial oversight and coordination role which it has hitherto played.
The Commission recommends that the Central Statistical Services is either (i) retained in its current form but better resourced, or (ii) transformed into an independent statutory organisation, similar to that of the State Enterprises or Science Councils. Furthermore, the CSS should report directly to parliament rather than to a minister in order for it to retain the integrity of its research outputs.

7.2.1.7 Re-Engineering the Public Service

The Commission believes that current proposals to restructure the public service will not bring significant changes in numbers employed or methods of work unless such initiatives are part of a more fundamental attempt to re-engineer the business processes of the state. With appropriate business process re-engineering, however, we believe that the public service will be able to meet the national objectives for service delivery while at the same time achieving the targets set down in GEAR.
The Commission believes that BPR is likely to be the best approach for ensuring:
- That departments overcome their functional parochialism and embrace the "one-stop shop" or "single window" approach to the delivery of service as advocated elsewhere in the report;
- That the current structural, process and other constraints, delays and blockages in service delivery are successfully overcome (such constraints are identified for example in Chapter 3, Section 3.7.2 of this report, and in much greater detail in the specially commissioned Process Analysis of Service Delivery, see Annexure 7).
The Commission therefore recommends that a Task Team be established by the Cabinet as a matter of urgency to consider how the business of the public service can be re-engineered. This BPR Task Team might eventually be located with the Organisational Review Agency proposed above.

7.2.1.8 Deputy Ministers

The Commission could not see any real need for the current large number of deputy ministers. We recommend, therefore, that the current practice of appointing deputy ministers randomly be reversed, a proper rationale for appointments be developed and that, in general, ministerial reliance for support should lie with senior public servants.

7.2.1.9 Provincial Administrations

The Commission felt that the problem of centralisation/decentralisation should not be posed as a trade-off. An intelligent system of government will, of necessity, include elements of both these trends. The imperatives of national unity, social equality, and overall policy coherence should not be overlooked.
Whilst the Commission endorses the current move towards greater decentralisation, designed to bring government closer to the people, our investigation brought home vividly the fact that in the rush to devolve powers, insufficient attention was given to the capacity of the provinces to assume these powers. In particular, given the poor financial control culture of some of the former "Bantustan" administrations, it is not in the least surprising that the controls currently in place in some of the provinces are in many ways seriously defective.
With specific respect to the Eastern Cape and Northern Province, the Commission urges the Government to maintain constant vigilance over these two provinces. We are concerned that in these cases we are dealing with much deeper problems than may have at first appeared to have been the case. The Commission is aware of the enormous problems facing these provinces, but is not persuaded that the leadership in them have come to grips with the challenges facing them. We recommend, therefore, that the National Government should not hesitate, in certain dire circumstances, to resume functions delegated to certain provinces or their departments, where those provinces provide irrefutable evidence of inability to carry on those functions.
In the light of the changes introduced by the Public Service Laws Act of 1997 (see in particular Chapter 3, Section 3.4 of this report), the Commission recommends that the status and role of provincial DGs be clarified in practice and, if necessary, in law. Whilst the Commission supports the "de-linking" of provincial DGs from chief accounting officer responsibilities, we nevertheless feel that it will be crucial, to avoid possible institutional fragmentation, for them to assume a key coordinating role in the provinces.

7.2.1.10 Developing a Professional Management Corps

The Commission believes that it is essential for government to invest in the long-term development of a professional managerial corps throughout the public service. This belief is based on the Commission's recognition of the need:
- To move away from the traditional career-based model of public service management, in favour of a model based on contract-based employment of the entire management echelon. The present contract system applying to DGs should, in the opinion of the Commission, be progressively applied to other levels of management, from Deputy DGs to Directors;
- To develop all-round managers with experience in a range of portfolios, by creating opportunities for greater mobility;
- To develop a managerial esprit de corps through joint workshops and training opportunities.

7.2.1.11 Alternative Service Delivery

The Commission recommends that serious consideration be given to alternative service delivery systems, including outsourcing and the development of creative public-private and public-community partnerships. The principles of effectiveness, efficiency, economies of scale, and integrated, one-stop-shop services should guide the selection of the most appropriate service delivery strategy.

7.2.1.12 Monitoring and Evaluation

Monitoring and evaluation of performance is a very expensive venture. But the costs incurred pale in comparison to those of continued implementation of ineffective, cost-inefficient, and perhaps even harmful interventions. It is for this reason that the Commission recommends as a matter of urgency that more effective systems of monitoring and evaluation are designed, developed and implemented.
In the view of the Commission this demands a comprehensive strategic intervention, rather than a number of piecemeal reforms. This we believe should take the form of a White Paper on Public Service Monitoring and Evaluation, together with enabling legislation, where appropriate, to ensure the necessary levels of compliance.

7.2.2 Managing Human Resources

7.2.2.1 The Strategic Importance and Planning of Human Resources

The transformation of human resource practices in the public service is critically important in building skills and capacity for good governance, and needs to be given greater priority and to be systematically integrated into broader departmental policy and strategic plans, as well as into the budget cycle.
The strategic importance of human resource management and development should be reflected in the status and reporting lines of the responsible human resources managers. Currently many human resources managers operate at the middle management level, with no direct links to the strategic decision-making processes. This situation must be reversed by rasing the status of such managers and establishing direct lines of reporting to the Head of Department.
Clear guidelines as to what human resource planning entails should be developed by the DPSA/OPM. The DPSA should also consider including guidelines on policy formulation and implementation with respect to human resources in the proposed management guides which will shortly replace the public service staff code. It will also be necessary for the DPSA to assist departments in developing an approach or formula for determining the ratio of the HR budget to the overall departmental budget.
All managers, including line-function managers, must be trained to understand the importance of human resource planning, management and development, particularly in the light of the responsibilities that will be delegated to managers under the 1997 Public Laws Amendment Act and the recent White Paper on Human Resources Management.
Departments should utilise multi-year planning cycles. The Medium Term Expenditure Framework (MTEF) provides an opportunity for rationalisation of human resources planning. Amongst other things, this will cover succession planning, career pathing and representivity imperatives.
The role of provincial Corporate Services units in human resource development should be focused on the provision of advice and support in planning and capacity building. This will include consistent reference to the strategic priorities of the province in identifying the broad training and development programmes.

7.2.2.2 Affirmative Action and Representivity

A holistic human resources development strategy needs to be developed by departments and provinces, with clear development planning, career paths, training opportunities, staff retention policies and accelerated development mechanisms targeted at the most disadvantaged within the public service, as well as at those who are being recruited to redress the racial imbalances at the more senior levels. Norms should be the targets set in the WPTPS.
A systematic review also needs to be carried out by departments and provinces (with support from the DPSA/OPM) of current recruitment, promotion, training and development practices in the public service, with a view to determining how these may discriminate against Black people, women and people with disabilities. This should form the basis for the formulation of more effective AA strategies.
Existing legislation needs to be revised and new legislation introduced to promote affirmative action. Effective mechanisms will need to be put into place to ensure that such legislation is adhered to. Laws against sexual harassment in the workplace should be enacted and implemented.
All public service departments and agencies should be required to draw up effective affirmative action and employment equity policies and strategies, particular in relation to gender and disability.
Strategies specifically targeting the disabled as a disadvantaged group would have to include specific recruitment and selection strategies at different entry levels; staff development and training; career pathing; the necessary modifications and adaptations required to provide an adequate working environment for the disabled; as well as plans for improving service delivery to people with disabilities outside the sphere of public service employment.
AA plans and programmes should be accurately costed and appropriate budgetary provision made, within the context of the new approaches to budgeting and costing proposed in Chapter 5 of this report.
The introduction of performance-related contracts for Heads of Departments (as recommended in the WPTPS and strongly endorsed by the Commission) should include specific AA targets (particularly in relation to gender and disability), thus giving HODs the necessary incentive to take a more proactive approach to affirmative action and representivity.
Awareness training for senior managers should be introduced to enable them to plan and implement effective strategies for women and the disabled in particular. This should be part of a broader awareness campaign both inside and outside the public service.
Special programmes, such as valuing and managing diversity, should form part of public service affirmative action strategies to prevent the "old" bureaucratic ethos perpetuating itself as new candidates are recruited to the service. A change in ethos is critical to changing the public service into an effective, efficient and representative arm of government.
AA strategies should also address issues of social class. A wider focus is required to address the needs of the most deprived and subordinate sections of the public service to provide them with more effective skills development, career pathing opportunities, and the means for upward mobility.
Monitoring and evaluation of the transformation process should take place on a regular basis to enable departments to assess the extent to which change is taking place. This should go beyond the monitoring of figures relating to representivity by examining qualitative changes in the environment, practices and processes of the departments.

7.2.2.3 Human Resources Provisioning

The importance of Human Resources Provisioning (HRP) should be more widely recognised and acknowledged within departments, and its current "Cinderella" status significantly enhanced. The systematic planning of HRP should be improved and linked to broader strategic policies and plans for HR, service delivery and representivity. This will be particularly important given the current move the decentralise human resources management functions to departments and provinces.
Clear HRP policies and procedures should be developed by departments and communicated to staff at all levels. Recruitment, selection and advertising policies should be designed to attract the best candidates possible from the widest pool, whilst at the same time enabling departments to promote a possible external image of themselves as progressive and caring employer.
All actual and potential recruiters (including line managers where appropriate) should be trained how to recruit, interview and select candidates in a way that empowers rather than disempowers candidates.
Comprehensive induction processes should be developed and introduced for all new staff. Probation should be more actively managed to enable new incumbents to familiarise themselves quickly with their environment and their jobs.

7.2.2.4 Performance Management

The DPSA/OPM should initiative a broad-based discussion of the various models of performance management available to ensure accountability and coordination across the public service. A comprehensive management development programme should be initiated, not to train managers in one system or model of performance management alone, but to introduce them to a variety of mechanisms for coordinating work and improving performance.
A phased approach to performance management should be adopted, linked to the overall transformation of the public service, and the specific transformation and service delivery goals of individual departments and provinces. The responsibility for this process should lie either with Heads of Departments or be located in the HOD's office.

7.2.2.5 Human Resources Development

There is need for the development of an integrated human resources development policy for the public service.
The South African Management and Development Institute (SAMDI), as currently constituted, does not have the capacity to effectively undertake the on-going process of public management training; accordingly its staffing and infrastructure should be rationalised and its role and location clarified.
The Commission recommends that SAMDI should cease over time to be a direct provider of training, and confine its functions instead to ensuring that public management training needs are met by other appropriate providers, especially the Schools of Public Management at tertiary institutions, but also including competent training providers in the private and NGO sectors. It should also oversee the maintenance of high standards befitting the requirements of a professional civil service.
There is a general need for the development of a comprehensive set of training and education programmes by each department. This would ideally be based on needs assessment, linked in turn to the strategic priorities of the department, and integrated into the budget planning process.
There is a need to standardise the involvement of line-function managers in determining training and development programmes. This is related to the integration of human resource development into the broader planning cycles of the department.
In addition to in-service training and education and formal courses, there is a need to increase the use of secondment and other informal staff development initiatives (such as work shadowing and mentoring) as a strategy for rapid skills development, especially in areas of critical shortage.
Systematic use of benchmarking should be introduced in departments in line with the competency-based approach to human resource development envisaged in the National Qualifications Framework.
For lower grade workers, it will be critical to utilise linkages with the National Qualifications Framework for developing career management and succession planning.
The urgent need for an assessment centre or assessment processes is indicated by the career management and succession planning imperatives indicated in the White Paper on a New Employment Policy for the Public Service.
In line with the proposals in the WPPSTE, the Commission recommends that a formula for departmental training and education budgets be developed by the DPSA/OPM, in collaboration with the Department of Finance. This will be based on agreed norms and standards in relation to (i) the time to be made available for training and education (for example, an average of 5 days per person per year); and (ii) a specified financial target for training and education (for example, one per cent of each spending agency's previous years total budget). A more sophisticated formula should be developed as more reliable data becomes available. Once the annual training and education budget is approved, it will be up to heads of department to implement the agreed training and education strategy.

7.2.3 Budgeting and Financial Management

7.2.3.1 New Structures to Improve Coordination

The Commission recommends that a Finance Committee be established as a sub-committee of cabinet to promote the effective integration of the strategic planning and budgetary processes, and ensure effective political oversight of them. This committee would be chaired by the Minister of Finance, and its decisions would take the form of recommendations to full Cabinet.
Similar finance committees should be established in the provinces. These would be chaired by the MEC for Finance and would report to the provincial EXCO.
Appropriate technical planning committees should be established to support the work of these finance committees at both the national and provincial levels. These should work closely with the Cabinet Secretariat, the new Coordination and Implementation Unit, and officials from Finance and State Expenditure, to ensure greater integration between the planning and budgeting processes.

7.2.3.2 Inter-Governmental Financial Relations

Reforms should take place in the structures of inter-governmental relations, in line with recommendations contained earlier in this chapter, to facilitate the more effective reconciliation and harmonisation of national and provincial priorities, and the coordination of sectoral programmes with national and provincial budgets.

7.2.3.3 A Performance Based Approach to Budgeting

A Task Team should be appointed and headed by the Minister of Finance to draw up plans and options for a Performance Based Programme Budgeting (PBPB) system, on which the MTEF will based, for discussion and approval by the extended Cabinet (cabinet ministers and provincial premiers). Support from the extended Cabinet should signal political commitment at the highest level for the introduction of this new budgetary approach.
This PBPB system be based along the lines proposed in Chapter 5 of this report. The PBPB system will link service delivery outputs of departments and their broader impacts on society (outcomes) to the public resources used to generate them. Policy makers will be provided with better information on which to base decisions and plans. So too will public service managers, parliament and the provincial legislatures, and civil society.

7.2.3.4 New Forms of Costing

To facilitate the implementation of the PBPB approach to budgeting, a system of activity-based costing be devised and introduced throughout the public service, to replace the current system of resourced-based costing. Such a system will be designed to ensure that all the input costs associated with a particular programme can be identified, that the analysis of estimated future costs of such inputs is used effectively to forecast future programme costs, and that the MTEF based on the new approach to PBPB reflects the true cost of service delivery.
Current computerised systems should be modified and up-dated to provide the necessary information required by activity-based costing. Appropriate guidance, support and training should also be provided to ensure that success of this new costing system.
In the longer-term serious consideration be given to the phased introduction of an accrual accounting system to replace the current and flawed system of cash accounting.

7.2.3.5 Overcoming Unfunded Mandates

When new norms, standards, programmes or policies that have cost implications for one or more spheres of government are adopted outside the normal annual budgeting process, the financial implications should be presented to Cabinet/EXCO as part of the decision-making process before final approval is given. Policy should never be approved without accurate costing.

7.2.3.6 Enhancing Managerial Responsibility and Accountability

The current move towards performance-related contracts for heads of department should be expedited (and extended to cost centre managers within departments) to promote greater managerial responsibility and accountability for results. This will also involve the formulation and implementation of appropriate performance measures, the introduction of more effective monitoring systems, legislative and other changes to afford managers the necessary flexibility over recruitment and procurement procedures, and the provision of guidance and support to enable managers to exercise their decentralised powers efficiently and effectively.

7.2.3.7 Strengthening Parliamentary Oversight

The role of the National Parliament and provincial legislatures in the budget process should be enhanced, inter alia, by modifying the timing of the budget cycle to allow additional time for parliamentary scrutiny and oversight; by revising the format of the "White Book" of budget estimates to furnish MPs/MPLs with as much relevant information in as accessible a manner as possible; and by instituting effective capacity building programmes for parliamentarians and their support staff.

7.2.3.8 Increasing Popular Participation in the Budget Process

More structured opportunities should be created for popular debate and involvement in the budget process, and more time should be structured into the process to allow for public hearings by the relevant national and provincial financial committees. Budgetary information should be provided in a more accessible, timely and user-friendly form.

7.2.3.9 Monitoring and Evaluation

The National Government and each provincial government should establish a Programme Review Unit, most probably within the Finance or State Expenditure Departments. Such a unit will help to create a co-ordinated framework for conducting programme reviews and administrative efficiency reviews.
Each department or agency should be required to produce an annual report that would include, inter alia, an account and assessment of service delivery over the year (against planned outputs and outcomes), with an associated cost analysis.
As the Auditor-General's traditional role as the watch-dog of procedural financial control will be diminished under the new budgetary system, the role of the AG should be re-focused on the performance evaluation of all key service delivery departments at national and provincial level.

7.2.3.10 Financial Management

Priority should be given to reforming the fundamentals of finance administration, particularly in relation to systems for financial and payroll controls, cash management, and asset and liability management.
Task teams, organised by the DPSA/OPM and the Department of Finance, should be established to work with departments and provinces in developing and strengthening their capacity in the area of financial management. In particular such teams will assess the effectiveness of current systems, processes and capacities; identify specific changes, training and other support required; provide appropriate "on-the-ground" training to key staff on new systems or processes, or on existing processes that are not currently fully utilized; and develop, in conjunction with departmental and provincial staff, a written financial reference guide that provides a detailed step-by-step description of standard processes as a further aid to staff training, development and awareness.

7.3.2.11 Procurement

The Commission endorses the decentralised approach to procurement proposed in The Green Paper on Procurement Policy, but recommends that a phased and gradual approach to implementation be adopted. This may well entail the retention of the Tender Boards whilst capacity to operate the new system is developed.
Appropriate guidance and support should be provided to departments/provinces to assist them in balancing the needs for cost-effectiveness in procurement with the broader socio-economic aims related to the development of SMMEs (who presently win only a very small proportion of tenders, despite the Government's commitment to Black empowerment).

7.2.3.12 The Role of IMST

The Commission recommends that a major development and upgrading of IMST takes place, in line with recommendations in Chapter 6 of this report, to assist the processes of reform and performance in the public service in general, and in the areas of budgeting and financial management in particular. This is to overcome the current situation where much of the data necessary for accurate and effective costing is lacking.
More specifically, systems such as FMS and PERSAL be supplemented by a system of financial management and monitoring designed to generate regular reports on service delivery and associated expenditure. The focus of such reports should be on areas such as expenditure patterns, service delivery and performance measures and indicators.

7.2.3.13 Building Skills and Capacity for Budgeting and Finance

A major investment in human resources development needs to take place in line with the recommendations in Chapter 4 of this report. This will be vital to ensure that the necessary skills and capacity are built for the new systems of budgeting and financial management proposed above.
In this regard, special attention will need to be focused on issues such as the recruitment and retention of capable staff; changes in the post classification and salary structures to ensure that competitive salaries are paid for those staff whose skills are in scarce supply; and the recruitment, training and fast-tracking of officials from previously under-represented groups.

7.2.4 Information Management, Systems and Technology (IMST)

7.2.4.1 The Responsibility for IMST

The Commission is of the view that IMST should be driven primarily by the business objectives of the state, and not the other way around. Although IMST can significantly change the manner in which the public service conducts its business, we believe that this transformation must be shaped by the strategic and operational requirements of the public service, particularly in relation to the provision of efficient, effective and equitable service delivery. The Commission therefore strongly supports the position that all important decisions regarding IMST should come from the senior political and managerial leadership of the state and not be delegated to the technologists.

7.2.4.2 Procurement Moratorium

There should be an immediate procurement moratorium on all large (above R5 million) information management systems and technology. This would be designed to create the political will to get the public service to agree on some basic standards to facilitate future data exchange and inter-operability.
It is proposed that the process to agree upon such basic standards be driven by an Inter-Ministerial Task Team and involve all affected departments and the provinces through focus group and working group structures.

7.2.4.3 Basic Building Blocks

The most immediate need would be for standards required for exchange of information between different systems. The unique identifier plays a crucial role in that respect, but network standards will also be required. Common formats for electronic exchange of information between government and private institutions, companies as well as the public should also be established based on Internet related techniques. A programme for establishing other standards would need to be agreed by the inter-ministerial task team. Ultimately however, there would be a need for a more holistic business, information, systems and technology architecture for the public service.

7.2.4.4 National IMST Strategy and Implementation Plan

The Commission proposes that the above projects should be consolidated into a national information management strategy, information systems strategies and an information technology strategy for the public service. Such a strategy would of course need to be in line with any national information society strategy for the nation as a whole.

7.2.4.5 Chief Information Officer

It is proposed that a Chief Information Officer (CIO) be located in the Office of the President to co-ordinate all public service IMST initiatives. The CIO would have a support staff and would interact with the rest of government and the private sector through two new committees which would also need to be established. These are A Policy Committee, comprising senior managers of those departments and/or provinces engaged in general IMST policy as well as including a number of some private sector managers; and a Technology Forum, comprising the IMST Managers from the key user departments and provinces.

7.2.4.6 Lead Agency Concept

In developing the above standards, architectures and strategies, the Commission proposes the acceptance and introduction of the lead agency concept whereby a particular state agency would be given primary responsibility to co-ordinate a whole-of-government IMST initiative in relation to a specific set of IMST functions in conjunction with other participating departments. In order to ensure inter-agency co-operation, personnel and resources would need to be shared on a programme and/or project basis, but ultimately the Minister and Senior Management responsible for the lead agency would be held accountable for performance.

7.2.4.7 Business Process Re-Engineering

Coupled with the lead agency concept, which is largely a short-term measure, the Commission proposes that in the medium to longer term the current functional differentiation of the public service be address on the basis of business process re-engineering (see Section 7.2.1.7 above).

7.2.4.8 Skills Development Plan

In order to address the critical skills shortage in IMST in the public service, the Commission proposes that a systematic skills development plan be designed and implemented to train new entrants to the information management and technology field. This will entail in particular a new four year internship programme which would lead to an accelerated but nevertheless equivalent qualification to those currently offered by tertiary institutions. Although this programme would be open to all, special emphasis should be given to seeking interns from historically disadvantaged communities to ensure that representivity is addressed.

7.2.4.9 Electronic Government

The implementation of electronic government is probably the best way to build capabilities that enable the public not only to access information but to conduct transactions with government departments. The Commission therefore recommends that government give serious consideration to migrating to completely electronic communication within the next five years.

7.2.4.10 Public/Private Risk and Reward Sharing

The Commission proposes that new procurement models be used in the development, operation, maintenance and upgrading of information management system and technology. We suggest that avenues be explored to ensure that risks and rewards are appropriately shared between the public and private sectors.

7.2.4.11 'Crisis 2000' Project Office

The Commission believes that emergency measures have to be undertaken immediately to ensure that the systems are Year 2000 compliant. A 'Crisis 2000' project office should be convened immediately to coordinate and project manage all the Year 2000 initiatives in the public service in liaison with similar private sector initiatives and projects.

7.2.5 Local Government

In view of the importance of local government in respect of the local delivery of services, and its relationship to the other spheres of government, the Commission recommends that a separate inquiry be undertaken into this area by an independent Commission appointed for this purpose. Such a Commission, if appointed, might choose of course to be guided in its work by the methodology, findings and recommendations of the PRC.

Appendix 1 : Policy documents and legislation

In its investigations and studies the Commission referred extensively to a large number of policy documents, bills and acts. Some of the main ones are listed below.

Green Papers

Green Paper on Employment and Occupational Equity. Department of Labour, 1996.
Green Paper on Public Works Towards the 21st Century. Department of Public Works, 1996.
Green Paper on a New Law for a New Public Service: Policy Proposals for a New Public Service Statute. DPSA, 1996.
Green Paper on a New Employment Policy for a New Public Service. DPSA, 1997.
Green Paper on a Conceptual Framework for Affirmative Action and the Management of Diversity in the Public Service. DPSA, 1997.
Green Paper on Skills Development Strategy for Economic and Employment Growth in South Africa. Department of Labour, 1997.
Green Paper on Procurement Policy. Department of Public Works and The Department of Finance, 1997.

White Papers

Reconstruction and Development White Paper. Office of the President, 1994.
White Paper on Transformation of Public Service. DPSA, 1995.
Draft White Paper on a New Employment Policy for the Public Service. DPSA, 1997.
White paper on Human Resources Management in the Public Service. DPSA, 1997.
White Paper on Service Delivery. DPSA, 1997.
White Paper on Public Service Training and Education. DPSA, 1997.
White Paper Improving Public Service Efficiency. DPSA, 1997.
White Paper on Transforming Public Service Delivery - Batho Pele. DPSA, 1997.
White Paper On Social Welfare. Department of Welfare, 1997.

Legislation

Bills

Open Democracy Bill, Draft, 1997.
Basic Conditions of Employment Bill, 1997.
Employment Equity Bill

Acts

Interim Constitution, 1993.
Public Service Act, 1994.
Constitution, 1996.
Labour Relations Act, 1996.
Public Service Commission Act, 1997.
The Public Service Laws Amendment Act, 1997.
KwaZulu-Natal Government Performance Act, 1997.
Intergovernmental Fiscal Relations Act (IFR), 1997.
Basic Conditions of Employment Act, 1997.

Appendix 2: List of annexures attached to the report

ANNEXURE 1: PRC BUSINESS PLAN
ANNEXURE 2: STATISTICAL ANALYSIS of PUBLIC SERVICE PERSONNEL
ANNEXURE 3: INTERNATIONAL STUDIES
1. Ideas and Practice in Public Management Reform by Martin Minogue
2. Human Resources Management: International Comparative Experience and Benchmarking by Willy McCourt
3. Financial Planning, Accountability and Management in the UK by Deborah J Williams
4. Transforming the South African Public Sector using IT: A Core-Periphery Approach by Richard Heeks and David Mundy
5. Managing Reform Processes: Some Ideas from the Commonwealth by Alex Matheson
ANNEXURE 4: INTER-GOVERNMENTAL RELATIONS
1. Inter-governmental Relations by Professor Chris Tapscott
2. IGR: Review of Issues and Legislation by Professor Nico Steytler
ANNEXURE 5: HUMAN RESOURCES
1. Report on the Human Resources Process Study by Ms Nozipho January-Bardill, Mr Sam F Mphuthi, Ms Gemma Paine and Ms Glenda White
2. Recruitment and Selection Process Study by Ms Nozipho January-Bardill, Dr Meshack Khosa, Ms Gemma Paine and Ms Glenda White
ANNEXURE 6: FINANCE, BUDGETING AND PROCUREMENT
1. Study on the National and Provincial Budget Processes by Ms Tania Ajam
2. A Process Study of Financial Transfers by Conrad Barberton
3. Procurement Process Study (incorporating outsourcing) by Mr Sam Amod
4. Working Paper on Planning and Budgeting in South Africa by Dr A.W. Johnson, Ms Rosemary Proctor, Ms Anne Evans and Dr Alf Carling
5. Budgeting and Financial Management by Professor Iraj Abedian, Tania Ajam and Conrad Barberton
ANNEXURE 7: PROCESS ANALYSIS OF SERVICE DELIVERY IN THE PUBLIC SERVICE by Mr Simon Ratcliffe, Mr Patrick Brennan, Ms Avril Joffe, Ms Shelley Kestan, Mr Meshack Khosa, Ms Judith Kippin and Ms Janine Rauch.
ANNEXURE 8: INFORMATION MANAGEMENT, SYSTEMS AND TECHNOLOGY
1. Process Analysis of Transactions (Data-Flow in the Public Service) by Mr Richard Layton and Mr Chris Rowse
2. The Use of Information Technology in the Public Sector by Aubrey V Malabie

Appendix 3: Issues identified by commissioners following public presentations of national departments, provinces, organisational components of government and other organisations to public sessions of the PRC

The issues outlined below reflect the impressions and observations made by Commissioners and members of the Strategic Team after each public presentation by government departments, provinces, organisational components and other organisations. The purpose of this exercise was to assist the Commission in its overall understanding of the activities of these organisations, their core business, transformation policies, and the efficacy of their structures. The process was invaluable to the Commission in enabling us to understand where different departments and units fitted into government and how, and to what extent, they interacted with each other.

The "issues" are not recommendations and do not necessarily reflect the unanimous view of the Commission. Instead they are working guidelines used by the Commission to inform and influence its work, and in particular to assist us in evaluating the verbal presentations, written submissions and other information that was presented to us. We hope that by including these issues, departments, provinces and agencies might be able to derive useful insights from them to guide their own efforts at public service reform and consolidation.

National departments and organisational components

Department of Agriculture

Issues

The perception of the Commission is that this Department seems strong on both policy and delivery capacity. Verification is needed.
To what extent would it be feasible to amalgamate the Departments of Agriculture, Water Affairs and Land Affairs? What would be the implications?
The Department seems to have a rather ambitious financial management system in contrast to the provincial departments. Does it assist the provinces?
Further information is needed on the relationship between the Marketing Council and the Agriculture Boards.
We need more information on the current and future role of these Boards.
Further enquiry is needed in regard to perceived conflicts between the national and provincial departments (especially in the Western Cape) over delegated functions.
Enquire into the impact of the KWV matter on the department and what lessons have been learnt from this.
What criteria is being used to determine national and provincial competencies? Where does the department have oversight?
What are the criteria to determine capacity in the devolution of national powers to provinces?
Investigate why this department wishes to have its own institutional training?
Information is needed as to the mechanisms/channels by which the Marketing Council communicates.
Does the department have a policy on the El Nino factor.

Cross-cutting Issues

An examination of the Constitution is needed in respect of asymmetrical delegation of powers between provinces.
Enquire into the role of national departments with respect to oversight (policy guidance, coordination, monitoring)?
Consider the current debates around national intervention into provincial affairs arising from the Ncholo Report. Is this only an interim tactic? (It was felt that the matter needed to be treated with caution by Govt).
To what extent do provinces focus on their own capacity building? Is it to be assumed that there is capacity at the national level to assist provinces?
How is capacity determined, what criteria are used?
The issue of control (health, agriculture, education) over utilisation of training institutions needs further investigation.

Department of Arts, Culture, Science and Technology (DACST)

This department performs important national functions and appears to have assembled a competent and enthusiastic team.
The department seems to lack coherence. Its core business is unclear to the Commission.
Its style and thrust seem to be more in the nature of advocacy than operational? (The department defines itself as a "watchdog").
To what extent can it carry through its desired policies or is this wholly dependent on other departments?
Its thrust seems to be one of oversight rather than directly operational.
Is there a basis for the continuation of the department as presently structured. Should it be re-aligned and if so with which department/s?
Progress has been made in the representivity of personnel. There is still some way to go at the level of middle management.

Central Statistical Services (CSS)

Issues

There is no doubt in the mind of the PRC of the importance of the brief of CSS and the maintenance of the integrity of its statistics.
Is CSS appropriately aligned/located to maintain its independence and integrity?
What is its relations with other science councils.
There seems to be a paucity in its statistics for the labour market, gender surveys and welfare support.
The purpose and brief of its research and development directorate is unclear to the Commission. The PRC was not convinced of the practical relevance of the outputs of this division -- which seemed overly academic.

Department of Constitutional Development

Issues

Further consideration of this Dept's core functions was needed. Would responsibility for Local Government continue to be a core function much beyond the year 2000? (Their role seemed to be to address inter-governmental relations in all 3 spheres of government -- would these not diminish over time?)
It was noted that the department did not have much knowledge about the Implementation and Coordination Unit (ICU) in the Deputy President's Office. Liaison would be beneficial to both.
Relations between the DCD and the Department of Finance regarding inter-governmental fiscal relation needed further enquiry.
Clarity was needed on how the Constitutional Review Commission was linked to other structures?
The Commission needed to consider where in the absence of a DCD would the current functions of this department be assigned?
There was some doubt as to the potential of the White Paper on IGR to resolve tensions, especially regarding some of the political factors.

Department of Correctional Services

Issues

Despite the comprehensive overview of the department, there was not a great deal of evidence of transformation.
There seemed to be a lack of political vision in the department and a lack of understanding of the different options to incarceration.
There were serious problems of "delivery" viz a viz the department's mission statements.
What strategies were in place to address the chronic leakages from prison; the overloaded infrastructure and indiscipline of personnel?

Cross-cutting issues

We need to look more closely at outsourcing to addresses the problem of IT personnel.
We need to further investigate the coordination of inter-departmental issues, eg the Department of Correctional Services (DCS) and the Departments of Justice and Safety and Security (SAPS).
Is the collaborative structure of the National Crime Prevention Strategy a model for an integrated criminal justice system?

Department of Education

Issues

The department seems unable to spend money allocated to it (re school building).
There seems to be a problem spending money allocated through the Presidential Lead Programmes rather than the money allocated through the departmental budget.
What steps are being taken to operationalise the governance issue at schools (are people informed/participating)?
There seems to be a delivery problem with farm schools (too many departments are involved -- Agriculture, Local Authorities, Education).
What is happening at provincial local authority level about school building (where are the blockages)?
The department seems to be strong on policy but slow on implementation.
The division of labour between National and Provincial needs to be explored.
On the issue of concurrent powers, there seems to be a reluctance by the National department to involve itself in service delivery.
The department seems to lack a relationship with the department of Labour eg labour market trends, changes in training needs etc.
Is there an adequate working relationship between the department and SAQA regarding the NQF?
The department does not seem to want a stronger association with the NQF/labour market prediction issues.
The department adopts "a holistic education system" but it is not clear how the framework is applied, especially with regard to tertiary institutions.
There are no national guidelines regarding tertiary education policy which makes it difficult for these institutions to undergo transformation.
Proactive measures seem inadequate to increase priority skill needs.
There seems to be some confusion about the status and place of an HR planning strategy in the department.
There seems to be an over-investment in physical facilities rather than on the supply of education?
Representivity in the department seems to be taking place too slowly.
There seems to be a question about capacity in the department.
How do intermediate structure assist or limit service delivery?

Department of Finance

Issues

To what extent is there a problem of under-staffing in this department? (This was indicated by the presenting team but not evident to the Commissioners).
We need to look more closely at the policy coordination aspects of budgeting.
We need to look more closely at the information flow between line departments and the DoF.
Where should the administration of pensions be located?
We need to look more closely at whether capacity building can overcome the structural gaps identified.
We need to look at the resource allocation for capacity building.
How are the provinces involved in the policy process? How is it being broadened?
Do the provinces have sufficient information to get involved in key policy and budgeting decisions?.
There seems to be a lack of institutionally systematic programme-evaluation capacity, who should do it (DoF, DoSE)?
Where do the responsibilities lie for forex policy and management?.
It is important to communicate the changes of policy to the public to avoid confusion. Who should be responsible for developing economic and policy literacy?
What is the role of Finance in overall Governmental policy making?
What is the role of Finance in providing financial and fiscal oversight over the polices of other departments?
What are the plans for transformation (both for internal and external transformation)?
Is there a programme for auditing obsolete legislation to create a more enabling environment for development?
What is the role of the department in ensuring economic policy performance?
Is monitoring the performance of GEAR part of the integrated activities of the department?
The department describes itself as a regulatory body, but it seems to have limited structures at a national, provincial and local level to play that role.
Is the function of the department to regulate the policy of other departments (with regard to their fiscal and financial viability)?
HRD planning and other corporate services are not seen as an important feature of the department's activities.

Cross-cutting issues

There seems to be inter-governmental ambiguity between provincial autonomy and the desire to establish national norms and standards.
Inter-governmental tensions are dealt with technically not politically.
We need to consider whether the state needs a different salary structure for key skill categories.
The seems to be an overall lack of investment in human resource development.

Finance and Fiscal Commission

Issues

Is there really an element of conditionality in the financial formula? If so how does it work?
One of the complaints about the formula is that it does not address backlogs in infrastructure. Is this correct? (If so, how would it work in eg the health and education areas?) The question needs answering of the vertical split between the national and the provincial (ie the proposal to increase the share of the provinces and decrease the national). Also, what will happen to the share of the provinces in the long run?
Our interviews with line departments in the provinces indicated a feeling that the decentralisation process has not benefitted them as much as it would have, if it were done centrally. Is this valid?
Complaints are often heard by national departments of underspending in the provinces and that money is tied up because they are not making proper use of it through lack of capacity. This seems to have led to a sort of re-centralisation strategy. Is this so? What is the position?
Given the great disparities in the provinces and the different capacities, eg Gauteng and the Western Cape etc, could there not be more asymmetry in one's approach to the funding formula?
The formula seems to be too technical, only leaving 10% or less for service delivery and thereby not incorporating sufficient of the social aspects. Please address this? (Why wasn't the social security portion included in the S Grant -- thereby having first cut of the provincial allocation?)
The formula would seem to have an urban bias, not reaching the poorest of the rural poor. Is this so?
We know that various countries were visited and overseas experts consulted, but was there an internal consultation process?
Once the allocations are made, how hard are the budgets ? If the province can overspend and always be certain that if it really makes a mess, national government will bail it out. If this is so, then what is the point of having a hands-on independent approach with greater involvement by national government in provincial government budgeting (eg the Eastern Cape Province current welfare difficulties)?

Department of Foreign Affairs

Issues

How has the Department changed its ethos in order to promote a culture of human rights internationally?
What is the status of the draft white paper?
The Department did not seem to have any over-arching guiding policy.
What is the Department's programme for transformation internally ie changing the management culture of the DFA (eg "flattening" hierarchies; transformation seems to be treated technically and narrowly)?
Representivity did not seem to extended beyond mission head to the technical experts.

Department of Health

Issues

The concept of health districts (which the department has pioneered) needs assessment.
The link between the Department of health and local authorities requires probing.
There seems to be a lack of coordination between health and other departments and local authorities.
Enquire into the efficiency of tertiary health training institutions reporting solely to the Department of Education and not also to the Department of Health.
There seems to be a mismatch between the Department's current priorities and the tertiary training being offered.
The need for a more effective communications strategy at the Department of Health needs addressing.
The relationship between Health and DPW regarding the former's clinic building programmes needs probing.
The variance of views between the Department of State Expenditure and Department of Health over budgetary reform needs inquiry.
Inquire into the problem of delays in procurement and how they negatively effect service delivery in the Health sector.
The functional relationship between the political and administrative Heads needs probing
Inquire into the delivery capacity at provincial levels.
"The Department of Health seems to have achieved a better balance between service delivery and internal transformation than other departments." This needs testing.

Cross-cutting issues

Public Service rules and structures are not always compatible with quality service delivery. Constraints on service quality need identifying.
To what extent can/should health districts be replicated across sectors?
The consequences of the different departments delivering services "within different geographic zones" needs investigating.
What are the problems arising from different planning boundaries across departments?
Enquire into problems concerning inter-sectoral coordination (vertically and horizontally).
Inquire into the quality of current procurement systems. To what extent are the new proposals for procurement likely to be viable and efficient?
We need to inquire (via the Department of State Expenditure) whether the new accounting system could/should be adopted on an experimental basis.
There seem to be some ambiguity regarding the interpretation of political and administrative authority between political and administrative heads.
Consider the need for a dedicated public service in the light of privatisation options.

Department of Home Affairs

Issues

Can transformation be presented as an end in itself?
How is transformation interpreted at Home Affairs?
How can they factor in other issues beyond internal transformation?
To what extent have they engaged in a consultative process with stakeholders external to Home Affairs?
To what extent have they focused on external delivery, pensions, passports, marginal communities?

Cross-cutting Issues

How can policy development be integrated across the whole of Government?
What prerogatives do departments have in policy making?
We need to get clarity on the core business of all departments we investigate.
What are the criteria in different departments for granting packages?
How do the severance packages compare to other Governmental budgetary priorities?
What percentage of the budget goes to training, is this a percentage of the overall budget (measure used by the public sector) and what is this money used for?
How do public sector training budget norms compare to those of the private sector?
What is the relationship between training and the Government's strategic objectives?
How can training expenditure become sustainable through the retention of trained staff in departments or across the public service?
How can we ensure that funds released by severance packages can be used to support Government objectives?
What issues around privacy, purpose and access are raised by the concept of a national database?
With regard to standard testing and codes of conduct, how are these communicated to customers and the general public?
Regarding affirmative action policies, is there a common terminology for the concept Black?
How can we ensure that affirmative action targets are part of the transformation process of different departments?
To what extent is there participatory evaluation and monitoring in HRD programmes?
With regard to developing a matrix that relates departmental activities to costs, is there a standard method to translate activities into posts?

Department of Housing

Issues

Their perceptions in respect of affirmative action and transformation need addressing.
Either the national department does not seem to take sufficient responsibility for delivery in provinces and local authorities, and/or inter-governmental institutions for following up on policy implementation need addressing.
There seems too much focus on policy and not enough on implementation.
Is there any emphasis in getting beneficiaries to participate in policy formulation?
The concept of organisational development is not appreciated by senior management.
There is an erroneous perception that affirmative action and capacity building are traded off against efficiency.
In the relationship between external delivery and internal transformation, the Department seems to have over-emphasised the former at the expense of the latter.
How do the Department's objectives link to Governmental priorities?
Is the Department aware of the White paper on Public Service Transformation?
How can the transformation process be speeded up? Greater intervention of the Minister needed?

Cross-cutting issues

What steps are needed to ensure representivity in the development of specialist expertise?
How do departments acquire specialist expertise ("grow their own timber", outsource, etc.)?
What kinds of strategic planning exercises are used to determine Departmental priorities (re service delivery, affirmative action, staff establishment, capacity development, affirmative action, etc.)?
What legislation impedes the implementation of policy?
What is the role of parastatals and other special purpose entities, how do they fit into existing inter-governmental systems, and how are they controlled?

Department of Justice

Issues

Insufficient attention to training issues.
Insufficient attention to post establishment issues.
Insufficient attention to policy formulation.
Management seems to have addressed too many issues at once, there is no apparent prioritisation.
There seems to be little inter-governmental collaboration on key policy issues (i.e., gender).
There seems insufficient concern about the disappearance of data (case files).
Insufficient detail of possible IT solutions.
It is not clear what is being done to change the organisational culture.
It is not clear why Justice is losing staff.
There seem to be few integral structures with other departments.
There seems insufficient attention paid to a thorough-going process of business re-engineering.
The presentation was unclear on alternative dispute resolution (ADR).
The Presentation was unclear on procurement processes (especially in terms of new facilities).

Cross-cutting Issues

Should there be a special dispensation for the remuneration of certain categories of staff?
How are HRD performance, output and national objectives linked together?
How does the current methodology of determining establishment size operate?

Department of Labour

Issues

What was this Department's role in developing policies that affected the public service. How did this cohere with the role of the DPSA; and was their an overlap or unnecessary duplication of work here? Can the Dept of Labour not play the role of adviser to the DPSA on labour issues -- internal to Government -- especially around Employment Equity/Affirmative Action?
How did the Department of Labour plan to revise the role of their Head-Office?
Where did the priorities of this Department lie: in policy formulation, programme development or in coordination of different units in the department?v· Further clarification was needed on the role and status of the Department 's Provincial Offices -- and also the extent to which the services of these Offices were utilised.
What were the performance indicators for the Labour Centres? Did they need restructuring (type, location, function, organisation).
Why in the pursuit of efficiency could the following areas not be outsourced:
- Unemployment Insurance,
- Compensation (actual pay-outs; not the evaluation of claims) and
- Labour Centres?
What is the relationship between the legal services section in the Department of Labour and the State Attorneys in the Department of Justice?
What are the elements that are taken into account in determining expenditure on training and development? Can the figure of 2.5% (of a department's budget) be recommended to other departments for expenditure on education and training? Or should it be 4% of the wage bill?
Would the 360 degree Performance Review be considered in the Performance Management System?
Elaboration was needed on the Department's ideas for a "One-stop Inspectorate".
What financial constraints were caused by the payment of R 7 million on supernumeraries while there are currently 600 vacancies? (Information on shortages and excess personnel were needed.)
The IT systems seemed well established at a national, regional and local level. Is this so?
This Department's criticism of State Expenditure regarding coordinating of the budgets for educational training undertaken by the department, needed further exploration.
Query their criticism of State Expenditure regarding the lack of substantial explanation for budget cuts and "arbitrary withdrawal of funds".

Cross-cutting issues

It seemed that the Dept of Labour, was left out of the MTEF process and are therefore unable to formulate corporate objectives because they do not learn about national priorities being formulated at the MTEF working groups. Check.

Department of Land Affairs

Issues

We need to explore substantively all the issues raised in the DG's submission to the Commission, eg Public Service and treasury prescripts on staffing.
Public Service change overall has been ad hoc and not fundamental.
Too many things have been changed at the same time.
Rules governing the employment of new staff and the dismissal of inefficient personnel have resulted in enormous delays in reshaping the DLA .
Prescripts on filling vacancies below management should be dropped. Departments should be able to design their own controls.
VSP has not achieved its goals; it has been attractive to good professional staff and of little assistance to those who should, in the interests of the public service, leave government.
A mechanism for employer-initiated retrenchments was needed to assist rightsizing and improve quality of staff.
The grievance procedure should be "decriminalised" ie it is currently adversarial and makes future working relations difficult.
The Central Bargaining Chamber does not take into account the diverse needs of the role players from the side of the employer. The "one blanket fits all" model is very inappropriate for a diverse organisation; it is difficult to attract and retain key personnel to implement reform.
Managers who are currently in the public service should be able to convert their employment to a time-linked contract without loss in pension.
PERSAL data is unreliable and deficient and not able to assist a manager who wishes to know how many staff are employed and the details of that employment and latest qualifications.
Greater discretion needs to be given to DG's to authorise deviation from the Treasury rules (less senior officials in the DoSE in practice often make the decisions).
Communication within government is inefficient and poor -- a strong central agency is needed.
Departments should have an accommodation budget from which they must meet their needs -- the DPW proposals for reform should be supported.
We need to look critically at this Department's recommendations for transformation.
How solid is this Department's implementation and performance management?
There is the impression that managers do not have sufficient latitude to manage. How strong is the Department's capacity for financial planning and management?
What is the Department's record of representivity at the level of middle and senior management?

Cross-cutting issues

Many departments are creating SMME databases, but these are not being cross-referenced so they can be accessed more widely.
Only a few changes in financial management or human resources development may bring about big strategic changes in departments: we are therefore looking for leverage on core problems.
We need to give credit to DPSA and DoSE for the changes that have already been made, these are already having an effect on departments.
How meaningful is the current role of inter-governmental forums?.
Intergovernmental relations seem mainly administrative and are not dealing with political issues which may give rise to political antagonisms. This question needs to be explored.
Is the disparity between capacity and political will of provinces factored into the formulation of policy?
It seems that national expectations are not being met in provinces and this raises questions about the uniformity of policy and minimum standards.
It seems that the minimum standards are not being costed at a provincial level and that this is not being linked to the devolution of functions.

Offices of the President and Deputy President

Issues

There is a concern about the capacity of the Cabinet Secretariat to support cabinet. Capacity constraints of both needed further research.
The communication and interface between the two offices need further investigation.
The working relations between the two offices were not clear. (This did not refer to the functions of the offices).
Further information was needed as to whether the Coordination Unit was appropriately structured to undertake the brief (To what extent if at all was the Coordination Unit funded by donor funds).
To what extent did the new structure meet the long-term institutional requirements of the Office or was it an interim arrangement?
We need to assess the structure of the unit; the need for its establishment and capability to coordinate.
We need to consider the advantages and constraints of two Offices of the Presidency and possibly suggest an alternative structure.
We need to establish what the processes are in establishing new Units; closing the RDP office etc, how programmes are assessed and who has responsibility for documenting decisions.
The organograms of both offices suggest a duplication of some levels of activities. We need to address this.
Does the coordination unit fill the vacuum identified at the centre of government?
We need to assess the efficacy of communication regarding decisions taken at cabinet eg (How do DGs learn about policy discussions?).
We need to address performance evaluation in the two offices.

Department of Public Enterprises

Issues

The department is very small -- altogether a staff component of 39.
There is need for staff to specialize in asset restructuring.
Enormous use of expensive consultants without internal capacity-building
This is a department whose mandate is to phase itself out. How feasible is this?
To what extent is the monitoring facility of the department effective, sufficiently specialized to provide direction and leadership?

Cross-cutting issues

Do size and responsibilities of public servants have any bearing on the remuneration package? (Does the DG of such a small department deserve the same salary and conditions of service as, say, the DG of Police Services? Is there a case for differentiation?)
What advantages does this Ministry take of the advantages of the MTEF to integrate responsibilities?

Department of Public Service and Administration (grading presentation)

Issues

The new policy on grading was not costed. There was a lack of clarity about the relationship between performance and grading.
It was not clear how rank promotion contributes to greater efficiency and transformation.
There seems to be no job-evaluation in the linking of salaries to grading.
To what extent is the principle of equal pay for equal work applicable?
Is there a rationale for retaining 329 occupational classes?
Should there be substantially fewer grades and what is the argument of labour for requesting fewer grades?

Cross-cutting issues

There is a lack of coordination in both salary reform and budgetary reform.
There seems to be a lack of direction in this respect in both State Expenditure and DPSA.

Department of Public Service and Administration (IT presentation)

Issues

What mechanisms have been used to motivate departments to develop their IT?
Is the DPSA the best agency for promoting and/or managing IT strategy nationally?
Where should the proposed IT Board be located?

Cross-cutting issues

There is a lack of a national IT vision.
There seems to be a lack of commitment and capacity to provide and/or communicate such a vision.
There is a lack of capacity to integrate IT policy at a national and provincial level.
What benefits are gained from the R 300 million spent annually by the state on IT?
What mechanisms and political support are needed to develop a coherent national IT strategy?
Has the reliance on outside consultants inhibited departments from taking ownership of their IT systems and led to the under-development of capacity?
Is the issue of inter-operability being addressed in departments?
Does IT relate to the future organisation and administration of the whole public service?
There seems to be a lack of understanding around the profound role of IT to amplify the effect of government policy, especially in getting feedback and managing the needs of the public.
Is IT a factor in current performance measurement and does it feature in education and training programmes?
Is there a potential conflict between IT's ability to deliver services and the need for job creation?
How can IT be used in the planning of national objectives?

Department of Public Service and Administration -- presentation on rightsizing

Issues

Were the DPSA programmes on reform likely to pre-empt the PRC's recommendations?
There was some ambiguity about rightsizing -- query "optimal size", supernumeraries, others.
Follow-up was needed on the internal transformation programme of the DPSA itself.
To what extent did national departments / provinces accept the proactive approach to policy formation and reform taken by the DPSA? Were there conflicts of roles, projects etc?
To what extent was international experience considered: Was there any external expertise in the DPSA rightsizing team?
Consider in detail the written submissions on rightsizing.

Public Service Commission

Issues

Define role of PSC (evaluation, policy-making, implementing).
Responsibilities of the department versus the PSC in evaluating outcomes or outputs.
The issue of merit is undefined.
Should the PSC be pro-active in preventing mis-management in the public service rather than just to react to problems once they occur?
How should post establishment be fixed?
Is the PSC the best agency to decide post establishment?
The PSC does not seem to be grappling with the complexities of post establishment (policy, finance, HR, quality, etc.).

Cross-cutting Issues

What is the best or most practical way of institutionalising the process of public service reform ( this question relates to the respective roles of the PSC, DPSA, DoF, DoSE, Cabinet, Office of the Deputy President, Public Protector, Auditor-General, Provinces, etc)?
The PSC needs to describe in practical terms how the communication flow happens between it and other key players?
Who is responsible to ensure public service is representative?
Should there be a code of conduct for consultants and advisors?
How does the general public become aware of the Public Service Code of Conduct?
Is the code of conduct clear enough on whistle-blowing and criticism?
Do the concerns of the PSC involve just Public Service administration or Government delivery?

Department of Public Works

Issues

Is there adequate progress in internal and external transformation?
The department seems unwilling to rationalise the functions of the regional offices and the provinces. Is this so?
To what extent does the national DPW have influence over the provinces (re 10 point plan)?
What are the new competencies and skills required by the provinces?
Should the current provincial departments (health, education) retain their Public works functions? Should they be undertaken by the national department?
To what extent are their key management systems aligned with national objectives?
There seems to be a conflict with other departments (health, education) regarding works functions.
Will downsizing by 5000 eliminate all staff but management and a small number of support staff?
The department seems to need greater specialist capacity in managing current as well as future activities.
Is there insufficient attention to development planning?
Is the substitution of user departments for the tender boards problematic (re corruption, equity, service delivery)?
How will the department prioritise the maintenance backlog?
To what extent should capital expenditure be prioritised over maintenance?
Who should prioritise?
To what extent does the department see IT as a management tool?
To what extent would it allow the information collected by it to be used by other departments?

Cross-cutting issues

Does the use of consultants undermine the departments capacity building and employment equity strategies?
What are the implications of APOPs for other departments engaged in public-private-partnerships?
How can the department retain skilled staff (varying public service salary scales?)?
The intergovernmental relations between national departments and provinces needs to be dealt with generally.

SAMDI

Issues

Questions were raised as to why SAMDI should offer courses already provided by other educational institutions.
Consideration needed to be given to the utility of SAMDI in its present form. Whether it needed a new mandate and if so what that mandate should be? (Ought they to become a regulatory and standards-setting body within the DPSA; work with the PSC in establishing public service education and training needs...or have some other function(s)?)
Was there a need for a distinct Civil Service Education and Training Institution in South Africa? If so, what compelling reasons for this were there?
SAMDI's relationship with other service providers needed clarification.
Clarity on how they perceived their role was needed -- providing only training ("emergency training activities" ) rather than taking on the responsibility for educating future civil servants in a systematic and coordinated manner.
Was SAMDI working in too many different directions. did they need to focus their activities more appropriately?
We need to consider the comments of some of the Provincial Administrations that SAMDI is not relevant to them.
We need to question whether the experience SAMDI drew on from long-time incumbents of the Public Service is relevant. (Could that experience be a liability that simply consolidated existing inertia?)
It was a matter of concern that SAMDI had not undertaken a needs analysis of Public Service personnel to establish what training programmes were needed.

South African Police Service

Issues

We need to explore the mandate of the Provincial Secretariats in the provincial offices of Safety and Security.
We need to understand the role and relationship between Commissioner Fivas, Meyer Kahn and Secretary Cachalia and also the Independent Claims Commission.
To what extent was the perceived lack of leadership in the team and tension between SAPS and the secretariat accurate and (if so) what is its effect on delivery?
To what extent has SAPS progressed in their transformation and other strategies.
We need further information on the deployment of people from Head Office to operational units.
We need to consider whether SAPS's remuneration scales should be different from other public servants.
We need to explore whether there are any linkages between performance management and remuneration.
Information is required on visible policing.
Further comment from SAPS is required on the issue of corruption.
We need to know the origins of the Shubane Report.
We need more information on collaboration within the region (SADC) regarding drugs and syndicates etc.
SAPS's Information Technology seems to focus mainly on operating systems and not on financial management. This needs to be explored.

Cross-cutting issues

Can there be a common grading and salary scale for the public service?
We need to further consider the role and modus operandi of the central bargaining council.
To what extent is there any linkage between financial management, human resource planning and budgeting in medium term planning.
To what extent is it feasible to have an Office of Management and Budgeting to link budgeting, planning and personnel planning?
The problem of IT personnel needs immediate attention, perhaps through the use of consultants and /or contractors so as to overcome the constraints on full time employment.
In terms of IT training and capacity building, we need to know who is undertaking this and what kind of training?
Is SAMDI being used by departments to service their training needs?

South African Revenue Services

Issues

A process study (ideally) is needed on the SARS, capturing the tax process.
We need to consider the relative advantages or disadvantages of organisations such as SARS which are set up to be independent of the Public Service.
All the Finance related departments (Finance, State Expenditure and SARS) seem to have a problem with representivity. We need to consider how this can be addressed.
There seems to be a particular problem with training in SARS specially around their bursary programme.
We need more information on the structure of their staff in terms of the specialised skills required.
We need to think more about flexible remuneration to help retain staff.
There is little evidence of HR planning in the Department, (given the specialised nature of this Department's work).
The governance of national statistics needs further consideration and there seems to be a need for a closer relationship between CSS and SARS.
Strategic Planning appears to need attention although note needs to be made of the ground-breaking work undertaken by this department.
There seems to be a problem with SARS being separated from the policy-making aspects of Finance.
Is there any case for outsourcing if the department is functionally autonomous?

Department of Transport

Issues

The department appears to have a well articulated conception of what the public service ought to be providing and the scope of its activities. (This was rare among departments and provinces who made presentations to the PRC).
There has been careful attention to policy development but to what extent is this accompanied by institutional (systemic) change within the department?
To what extent is policy implemented? Beyond the frameworks provided, what impact has this department made on the public?
Transformation is seen as a "trade off" between efficiency, professional competence and Affirmative Action?
There is a sense that the department is dismissive about its gender, racial and occupational imbalances as well as disability. (The emphasis is on professionalism, certification and the dearth of "specialists" in the field.)
What is the focus of the department; what is its core business?
Despite intractable problems, some progress on the resolution of taxi violence and regulation is discernible but slow.
Important new agency arrangements and partnerships had been entered into which might provide a model for other departments.

Cross Cutting Issues

What is the relationship between this department and Transnet?
What is the relationship between this Department and the Department of State Enterprises?

Department of Water Affairs

Issues

To what extent is the department a model for others in respect of innovation?
How is policy-making institutionalised in the Department?
To what extent does the national department use its authority to ensure policy implementation?
Determine whether the Department's affirmative action policies are too cautious.
Institutional arrangements for performance monitoring seem weak and need analysis. It is unclear what attributes are currently being measured?
Clearer definition is needed on the institutionalization of policy regarding public-private partnerships.
Inquire into the seemingly undue length of time it takes for departmental decisions to be made.
There seems to be a weakness in HR Planning strategy. To what extent does HR planning actually occur?
Representivity seems to be confined to the level of deputy-directors. An audit of the profile of the department's personnel is needed.
Do public impressions of Water Affairs match results?
To what extent do consultancy jobs include the SMMEs?
How great is the reliance on donor funds to implement policies? Is this a problem?
How prepared is the department for multi-year budgeting?
Is over-centralisation a problem in this department. Is the executive overly dominated by the political leadership?
How effective is the department's organogram? Are its structures appropriate, adequate, productive?
There seems to be a problem that MINMEC is insufficiently multi-lateral to deal with issues effectively.

Cross-cutting issues

There seems to be a need for policy integration at national level, perhaps through a clustering of departments?
"De-bureaucratization" needs to be addressed.
How is the relationship between DG's and Ministers managed? Eg should ministers take responsibility for delivery? How does this affect the devolution of decision-making?
The relationships between the Ministers and administrative heads need analysis.

Department of Welfare

Issues

Lack of literature and reports provided by welfare meant that a lot of welfare issues have not been covered.
The department's budget reform process linked to the medium term expenditure framework (MTEF) needs examination.
Given that the department handles large transfer payments linked to national norms, they may have a problem forecasting trends for the MTEF.
The department's reliance on outsourcing needs addressing. What are the implications for capacity building in these instances?
There seems to be an immediate priority to put systems and databases in place for purposes of policy support.
There is a need to address the degree of representivity in the department's committees and among its consultants.
The functional relationships between the political and administrative heads need addressing.
To what extent does the department have capacity to project future trends? Does it maintain a data base for this purpose?
There does not appear to be a system to provide an impact assessment on the work undertaken by the department. Inquire into this.
The recruitment, selection and induction of people joining the department need to be looked at (re bottlenecks/ quality of personnel/ representivity).
Assess the department's rationale and policy (if this has been formulated) for rightsizing.
Consider the department's capacity to anticipate and deal with fraud and corruption.
Assess the department's performance management, appraisal and appraisal instruments. Is there too much reliance for this on the DPSA?
Assess the department's systems for the flow of decisions and communication. (How far are decisions made at a senior executive level not filtering down?)
The appropriateness of the salaries of social workers is becoming a national issue. Is this being addressed?
Is there a comprehensive social security policy?
Is the department's financial planning constrained by the relative autonomy of the provinces? There seems to be a reluctance to interact regarding provincial affairs (concerning social security).
Assess the efficacy of the department's business plan to guide day to day management.

Provinces

Eastern Cape

Issues

There is a need to investigate the extent to which powers are delegated to provinces without the necessary resources.
The capacity of the Office of the DG to cope with the scale and complexity of its numerous requirements needs to be explored.
We need to further examine the difference between strategic planning, development planning and operational planning in the provinces.
We need to question whether all provinces have as high a degree of centralisation as appears to be the case in the Eastern Cape.
There seems to be a need to clarify who is the chief accounting officer for the province.
We need to further investigate the public sector work ethic, the question of supernumeraries, the statement "people have nothing to do", the lack of productivity focus, and the emphasis on posts rather than jobs people do.
We need to investigate the problem arising from funding local authorities (either directly or through the province) and how this affects accountability to the province.
There is a need to further investigate the relationship between the provinces and FFC, especially with regards to the formula for allocating funds.
The relationship between the provinces and the national bargaining council needs to be clarified.
We need to check the status of agreements made at the bargaining council.
We need to question whether national government should be delegating powers in some areas, while it should be centralising in others.
We need to investigate what should be the pre-conditions for a national authority devolving functions to the provinces.
There is a need to clarify whether the PAS requirements concerning seniority appointments still apply and if so, how this has affected delivery.
There is a need to enquire whether all stakeholders are drawn into social compacts to address service backlogs.
Clarity is required on the provinces "Marshall plan" and whether this is seen as an alternative to the macro economic policy. (Is the Eastern Province a special case?)
The idea of having two budgets (one for on-going operations and one for overcoming service backlogs) needs to be explored.
There is a need for a set of benchmarks on acceptable service levels, allocating additional resources to areas which fall below par.
We need to give more thought to the link between public service demotivation and the apparent lack of HR planning.
We need to investigate (possibly recommend a skills audit) in regard to supernumeraries and consider whether these cannot be re-deployed in creative ways.
We need to investigate why the DoSE continues to have two financial management systems in the Province. (To what extent is there a resolution of the problem of separate financial management systems?)
To what extent is it feasible to sort out IT problems in the Province without waiting for new options to be provided by the Department of State Expenditure?
There is a need to enquire into the functional role of the DG in this province.
There is a need to address the political and administrative interface in this provinces.
There is a need to investigate the relationship between Permanent Secretary and DG.
There is a need to enquire into the precise role of the PSC in this province.
We need to obtain the "backlog document" (referred to by Dr. Trudi Thomas).
Obtain information on how the Provincial cabinet will follow-up on the backlog document.
Obtain information on the updated organogram of the province.
Obtain more information on the current HR capacity in the province.
Acquire more information on the current skills audit.
Obtain more information on "ghost workers".
Acquire more information on staff vacancies.
Obtain information on the provincial responses to the Ncholo report.
Acquire more information on HR and training policies.
There is a need to interview the provincial audit team.

Cross-cutting issues

To what extent do the national departments have competency to determine provincial priorities in terms of Schedule 6 of the Constitution.
We need to investigate whether there should be a national competency to determine IT strategy for all public sector agencies.
We need to receive the responses of individual provinces on the Ncholo Study; explore the process adopted and obtain information as to the level of officials interviewed.
Enquire into staff who received retrenchment packages and who have been re-employed as consultants.
There is a need to recognise the asymmetry of different provinces. (We will therefore need to include issues specific to particular provinces in our enquiries as well as generic issues).
There seems to be a perception that provinces have been incorrectly treated as national departments by government. This should be addressed.
There is a need to question the extent to which provinces are constrained to follow national policy norms and standards.
There is need to enquire into the difficulties of the provincial tender boards.
There is a need to clarify the relationship between provincial and national departments.
We need to get more information on stakeholders forums.
We need to get more information on the R 1.3 billion that the national government owes the provinces (Why? What is the position?).
We need to get more information on transfer payments to the provinces.
Obtain further information on what is being done about involving personnel below management in policy formulation.
We need to get more information on whether there are special programmes to address gender and disability imbalances in senior management.
We need to get more information on how women and the disabled can be better integrated into mainstream public sector activities.
We need to get more information on structures to address the needs of disabled people and what is being done to redress gender imbalances? To what extent does the province utilise the services of the Gender Commission?

Gauteng

Issues

Delivery needs to be queried. It was not clear to all the persons on the PRC team whether there was a gap between the vision of the Province and implementation.
There seems to be a communication problem between senior management and other levels.
There was a query as to what will be happening to the PSC in the province? Will the absence of a PSC create a gap in policy formation/coordination/oversight of personnel/ standards in the provincial administration?
It was refreshing to find solutions in some cases and not just problems. To what extent are these solution transferable to other provinces?
The political and administrative inter-face in this province was novel and appeared to work, but would it work in other provinces?

Cross-cutting issues

There seems to be a lack of communication between national departments and the provincial administrations over policy implementation.
Further investigation is needed regarding unfunded mandates. What are the linkages between planning, costing and implementation?
There seems to be a problem with the MTEF which is formulated on sectoral lines; financial implications are only understood later.
Regarding safety and security, we need to know from all provinces what they have delivered?
We need to examine the impact of specific decisions of the central bargaining chamber on provinces and departments.
We need to look into the apparent inadequacy of PERSAL to meet its expected needs.
We need to explore what provisions are being made to teach people the necessary financial management skills.

KwaZulu-Natal

Issues

There seems to be a need to enquire into the interface between politicians and administrators in the everyday operation of departments.
We need further information on the role of the (acting) PSC in the Province.
We need to investigate whether legislation exists to facilitate in the transfer of excess personnel from the provinces to local authorities.
There is a need to examine service delivery in the province.
There seems to be considerable complexity in the relationship between the province and rural local government. This needs investigation.
There is a need to obtain a more precise view of the Province's corporate objectives and to evaluate how the DGs presentation is linked to this.

Northern Province

Issues

The Tender Boards need investigation; answers to our concerns about tendering were not clear.
There seems to be a leadership gap in the Province. Lack of political and administrative leadership seem to be an important cause of the problems in the Province.
Responsibility for coordination of the activities of different departments in the province is not clear. Who has responsibility for strategic planning?
To what extent are the structures and functions of the province working?
Transformation Unit does not seem viable.
Answers on gender questions were incompatible with transformation; there is a need for a gender office.
To what extent have misappropriated state assets been recovered in the province?
It was not clear why there are 16000 vacancies while there were so many supernumeraries?
We need a clearer definition of funded vacancies.
There seems to be a problem with 93% of the budget going to staff costs. Was this figure accurate?
Definition of HRD was vague.
Problems with delivery seem to relate to a failure in HRD.
There seem to be tensions between different levels of management, and the distribution of powers between office of the premier, DG and PSC.

Cross-cutting Issues

We need to investigate the configuration of provincial departments given that these do not match up with National.
We need to consider the role of the DG's, HOD's and MEC's in all provinces.

Western Cape

Issues

We need to explore to what extent the centralisation question in the W Cape is a problem: i.e. issues relating to the devolution of functions; issues around dis-empowerment and de-motivation of personnel and structural issues.
We need to enquire into the reasons for the province's conflicts in inter-governmental relations.
Further information concerning progress in inter-sectoral collaboration is needed.
We need further information on how the different delivery agencies interact.
We need further information on the process of budget formulation (transparency, debate, dialogue).
The statements about affirmative action did not reflect an appropriate attitude towards transformation.
There was a lack of IT vision and policy.

Cross-cutting issues

The centralisation/decentralisation issue needs further investigation.
We need to follow-up the statement that the DPSA's Provincial Audits were characterised by a lack of consultation.

Cross-cutting issues -- pertaining to overview of government

The following include cross-cutting issues some of which need to be reflected in the Final Report of the Commission. Where they were taken up they are more fully articulated in the Report.

To what extent is there a lack of inter-connectedness between the policy initiatives emanating from the various departments.
There are currently parallel efforts at transformation -- what's in place to align these? Do we endorse the DPSA initiatives? What is the DPSA doing about alignment of processes following the Ncholo Reports?
There is concern about the the re-design of the role of Provincial DG's. (Would they retain overall oversight and accountability?)
What is the need / function of the Deputy President's Office in terms of coordination?
Structures of the Deputy President's Office and the President's Office. How adequate were these?
What changes were needed in the structures of departments involved in the criminal justice system SAPS / Correctional Services / Safety & Security.
Departmental / ministerial clusters. These needed to be further studied.
Capacity building in the Public Service -- what was the role of SAMDI?
DPSA and PSC -- what should their roles be?
What would be the role of DPSA beyond transformation?
What should be the role / function of the PSC?
Autonomy of provincial departments: (to what extent were they "autonomous" of the national).
Which are the core national / corporate functions which provincial departments cannot have autonomy / authority over.
Moratorium on IT procurement -- proposal by sub-group.
To what extent was there a supply of specialist skills for government especially IT and Financial Management?
Is HR seen as a critical factor for success in government?
Relationship of IT to other applications / functions e.g. finance.
How adequate were Government resources in terms of information, institutions, money, people?
SARS -- what is the difference between public administration and the public service? Does SARS have distinguishing factors to treat it as an exception?
What is the status of autonomous entities (like SARS, CSS etc)?
Systemic weaknesses -- budgeting functions.
Unfunded mandates. Further enquiry was needed.
To what extent was there ministerial participation in planning and budgeting.
What special steps were needed for the creation of a professional ethos and the development of a culture of governance.
Hierarchies -- impact on transformation?
What is the quality of information sharing across government ( horizontal / vertical).
Performance management -- institutional / individual / central government. What recommendations were necessary?
Discussion was needed as to how to internalise transformation and bring it into the mainstream .
How does performance monitoring / organisational culture / transformation impact on service delivery?
Affirmative action -- need for a national policy for the Public Service to avoid the duplication of AA policy making processes across departments.
Need for consensus on AA policy.
Should we assess and comment on specific departments in the Report or deal with issues broadly?
Service / Performance Contract employment -- only for DG's? Why not broader?
The various views on the procurement system needed to be considered.
What does "autonomy" mean vis a vis procurement?
Policy / HR / Control / Corruption in procurement. What public confidence is there in the procurement system at present?
Financial administration requirements (what progress was being made towards uniform systems across government)?
Right sizing position / status at present?
There is a need for a matrix of what government should be doing during the transformation and post transformation process.
What is the role of the State ie "what ought the public service to be doing"? Need for regular skills audits in the Public Service.
What phase is government in regarding development / transition?
There is a need for clarity on what is meant by the "developmental state" and how this is best achieved in the context of limited resources.
What conditions should be put in place to ensure that public servants remain in public employment and don't leave as soon as they are trained?
What was the extent of Government's role as a development agent? Models?
What needed to be done to ensure performance monitoring of Provinces?
What is the Commission's position on the conclusions in the Ncholo Reports?
Is the Constitution a given?
To what extent do portfolios of Ministers and MEC's need to be re-examined?

COSATU

We need to ask COSATU to answer the list of questions included in the transcripts and including those below.
We need more information:
- on their views on job creation;
- on their views on supernumeraries and ghosts;
- on their views on a larger civil service;
- on their views on the MTEF;
- on their views on the "developmental state" (including comments on productivity, rightsizing and work ethic);
- on their views on social compact on development and transformation (what would it include);
- on their views on their "sympathy with the provincial dilemma" (re central bargaining);
- on their views on public private partnerships.
We have a new government, but old business and old labour attitudes. Should labour attitudes not cooperate more with the new dispensation?

Appendix 4: Schedule of briefings

A. Offices of the President and Deputy President	Date of briefing
Office of the President	25.09.97
Office of the Deputy President	25.09.97

B. National ministries & departments	Date of briefing
Agriculture	11.09.97
Arts, Culture, Science & Technology	12.11.97
Constitutional Development	01.11.97
Correctional Services	12.09.97
DPSA - Provincial Audit Task Teams - IT/ Grading - Rightsizing - Transformation of Department	03.05.97 01.08.97 02.10.97 07.11.97
Education	16.08.97
Finance	02.08.97 13.09.97
Foreign Affairs	07.11.97
Health	15.08.97
Home Affairs	05.08.97
Housing	05.08.97
Justice	04.07.97
Labour	01.11.97
Land Affairs	06.06.97 11.09.97
Public Works	02.08.97
South Africa Police Services	06.11.97 11.09.97
State Expenditure	01.08.97
Water Affairs & Forestry	15.08.97
Welfare	16.08.97

C. Organisational components	Date of briefing
Central Statistical Services (CSS)	12.11.97
South African Management Development Institute (SAMDI)	01.11.97
South African Revenue Services	07.11.97

D. Provinces	Date of briefing
Eastern Cape	29.08.97
Gauteng	27.09.97
KwaZulu-Natal	30.08.97
Northern Province	26.09.97
Western Cape	12.09.97

E. Statutory agencies	Date of briefing
Financial & Fiscal Commission (FFC)	31.10.97
Office of the Public Service Commission	04.07.97

F. Other	Date of briefing
COSATU	27.09.97

G. Consultations	Date of briefing
Ms. Jesse Duarte, MEC, Safety and Security, Gauteng.	14.01.98
Dr. E. Kornegay, Head of the Office on the Status of Women, Office of the Deputy President.	20.01.98
Mr. Schuaib Chalken, Head of Office on the Status of Disabled Persons, Office of the Deputy President	20.01.98
Mr. N.L. Mathebula, MEC, Safety and Security - Mpumalanga	19.01.98
Mr. K.M. Gordhan, DG , Dept. of Transport	02.02.98
Mr. G.N. Morkel, MEC, Safety and Security - Western Cape	05.02.98
Minister F.S. Mufamadi, Safety and Security Mr. A Cachalia, Superintendent-General, Secretariat for Safety and Security	06.02.98
Dr M.P. Ncholo, DG, Dept. of Public Service and Administration	17.02.98
Mr. A. Erwin, Minister for Trade and Industry	18.02.98
Public Service Association of South Africa Mr. A. Lawrens Mr. Arnold Mokgabudi	19.02.98
Meeting of DGs	19.02.98
Mr. W.V. Lacey, SACOB	19.02.98

Appendix 5: Schedule of written submissions received by the PRC

1. Non-governmental organisations/community-based organisations/ individuals

Ref. number	Submission number	Author	No of Pages	Issue raised	Abstract
1. 1	2	Ms V Makaza Quigney, Eastern Cape	2	Employment Practices	A recommendation that the legacy of the bantustan system, which left people unable to deal with change, could be addressed through the transfers of functions and people from National departments to the regions. Training which is needs driven and evaluated as well as the screening of applicants by outside agencies is also recommended.
1.2	3	Mr E Masanejo Kwa-Mhlanga	1	Crime & policing	A list of suggestions to decrease the crime rate through increasing the police force and the payment of better salaries as well as changes in the justice system.
1.3	4	Ms I Beate Karlein Rondebosch, Western Cape	2	Crime & Unemployment	A recommendation that photographs of all criminals convicted of "soft crime" be featured in all Newspapers on a weekly basis and that community service be meted out as punishment for these crimes. Unemployment could be dealt with through collaborative efforts on the part of business and the unions by introducing compulsory apprenticeships for all school leavers. Incentives could be offered to businesses employing these apprentices.
1. 4	6	Anonymous Young Job Seeker Address Unknown	1	Tax Collection	The author who chose anonymity through fear of victimisation quotes from a television programme which reported that only 5 out of South Africa's 44 million people pay taxes. He recommends that a plan be developed to increase the tax base and that legislation be put in place making it compulsory for all people with bank accounts to register with the Receiver of Revenue.
1. 5	7	Mr E Finklestein Cape Town, Western Cape	1	Remuneration	A call for the introduction of a performance linked reward system, similar to that of Malaysia, for all Ministers, Deputy Ministers and Director Generals. Salaries should be fixed for three years with performance bonuses for those who meet required delivery targets.
1. 6	10	Anonymous Mellville, Gauteng	1	Work Ethic	An appeal for a return to a service culture which could be re-enforced through all letters being signed " I remain ,Your obedient servant".
1. 7	11	Mr A Misveni Address unknown	1	Income Tax Levels	An impassioned plea for the imposition of lower income tax rates and the involvement of all constituencies in the development and discussion around the State's budget.
1. 8	12	Mr G Maphaha Messina, Mapumalanga	3	General service delivery	Joblessness, high levels of crime, problems in education, fraud & corruption are all attributed to what the author calls "money". He also pleads for the elevation of the role of the church in nationbuilding.
1. 9	13	Mr F A Jourdaan Fish Hoek, Cape	1	Systems & practice	Suggestions for improving current systems and practices are provided. These include regular external audits and public report backs, the use of NGO consultants in Human Resource planning and MBA qualifications for all ministers.
1. 10	16	Illegibly signed letter Pinelands, Western Cape	3	Work Ethic, skills & competencies	The author expresses the view that governments who become too expensive create their own demise. He calls for the recruitment of only the most qualified people and the modernisation of systems and procedures to reduce labour costs. Front line people should be kept informed of all developments to enable them to respond intelligently to queries and the army personal could be deployed in departments experiencing staff shortages.
1. 11	18	Mr M Ranchod Dunswart		Crime & Corruption	The view is expressed that there is a link between levels of crime and corruption and the level of openness & transparency and the quality of systems for budgeting and financial planning. The establishment of geographically defined, multi-stakeholder anti- corruption committees are called for .
1. 12	19	Ms J Mackay Gauteng	1	Telephone Accounts	A call for comprehensive information to be supplied on all telephone accounts to assist subscribers to curtail costs and query inaccuracies.
1. 13	22	Ms R Watson Kwa-Zulu Natal	5	Maintenance courts	The author records her 14 year battle to obtain maintenance for her children. She expresses the view that there are exploitable loopholes in the current system with more rights accruing to the plaintiffs than the defendants. Prosecutors, she alleges are also poorly trained resulting in a low success rate.
1. 14	23	Mr F Tsoaedi Qwa- Qwa	1	Safeguarding of government assets	The author recommends that the safeguarding of government assets could be improved through the appointment of a core team of ANC members charged with the responsibility of ensuring that government policy is carried out.
1. 15	26	Mr C Sackville-West Dana Bay	2	Lack of employment opportunities	This pensioner provides information on his experiences and skills and laments his inability to secure employment or opportunities to publish some of his material.
1. 16	27	Mr J Moseneke Gauteng	1	Job Creation	A suggestion that job creation could be effected through the establishment of one nationwide burial society, with branch offices all over the country.
1. 17	28	Mr Kilpin Elgin, Cape	2	Work Ethics & attitudes	A suggestion that attitudes and work ethics could be improved through the use of film showing daily activities where public servants display positive, customer service orientated attitudes. He lists a number of scenarios.
1. 18	29	Mr J Stoffberg Western Cape	4	Health care , taxes	The author decries the use of certain contraceptive methods, high taxes, the absence of the death penalty and the monthly , instead of weekly payment of old age pensions.
1. 19	30	Ms W Dono Kwa-Zulu Natal	1	General service delivery	A list of ten recommendations to improve the effectiveness of recruitment practices, remuneration systems and measures to curb stealing.
1. 20	35	Youth For Christ, Pietermaritzburg Sally Mann, Acting Director	1	Justice- Childrens Court	The author attributes the lack of progress in processing cases in to bureaucratic delays and processes. She calls for the appointment of an ombudsperson with geographically defined jurisdiction to investigate complaints related to service delivery.
1. 21	38	C J Napier Groenkloof	1	Clustering of activities & government research institutions	A recommendation that similar functional activities be consolidated organisationally and geographically. The role of Institutions, like the Africa Institute of South Africa, set up under the previous order for ideological purposes should also be reviewed and mergers with other institutions investigated to save costs.
1. 22	39	C J Esterhuizen Western Cape	1	Pensions Administration (Civil Pensions)	Difficulties in obtaining information on the issuing of Life Certificates are outlined and frustration expressed at the lack of response to written and telephone enquiries. The author recommends that certificates be issued on a fixed date each year.
1. 23	42	Mr Z Hlatshwayo Witbank	2	Nationbuilding	A list of suggestions to bring about nationbuilding and to sustain South Africa's young democracy.
1. 24	47	H A Oliver Western Cape	2	Ethics & Values	A call for the upholding of "true liberal principles". The dismissal of incompetent people, right from the top, a client centred approach and a wealth creation role for much leaner government is called for.
1. 25	52 (a)	IDASA Mandy Taylor Project Manager, Political Information & Monitoring Service	9	Accountability, openness & transparency Transformation of public service delivery Review of status Information Technology & Systems	A submission recommending that: - Codes of conduct, insofar as they set out ethical standards should be absolute and binding on all employees. Accordingly they should be narrowly drawn, specific and enforceable; - Standards of delivery on the other hand, mean a change in culture and ethos of the Public service. A flexible approach that allows departments to set standards should be implemented; - Any measures introduced must be backed up with sufficient enforcement mechanisms, monitoring mechanisms and resources for them to operate effectively.
	52 (b)	IDASA Warren Krafchik Budget Information Service	2	Link between Public Sector reform and Budget Reform	The submission highlights the important linkages between public sector and government reform. It focuses on the relationship between the two; wage bargaining and provincial autonomy and accountability for performance as well as the monitoring of provincial and national delivery.
1. 26	55	Mr A K Maile Northern Province	3	Accountability & Rural Development	A recommendation that accountability could be improved through the provision of information to the public on the scope of jobs of Public Servants. Rural development, it is recommended , could be improved through training and skilling of local people , a focus on water supply and the training of small scale farmers.
1. 27	56	PM Goso Qumbu	2	Fraud & corruption	A list of recommendations dealing with the establishment of a Public Protectors Office in each province and the establishment of committees form communities to support this office as well as investigation of cases of fraud with prosecution of those found guilty.
1. 28	57	Dr A M Davey Western Cape	1	Accountability & Transparency	A recommendation that the Public Service Commission be en encouraged to publish an annual list of all state departments, their functions as well as basic information on all officials especially top management. Costs could be covered through the sale of this publication .
1. 29	59	Mr J Katz Northern Cape	1	Transparency	A suggestion that the definition of the word "transparency" has become murky through practices on the part of government where public servants found guilty of corruption are still given "golden handshakes". A call for renewed commitment and willingness to stamp out corruption is made.
1. 30	60	Mr E Malulyck Seshego	1	Transparency	A call for an education programme to inform the general public of the functions of the Public Service to effect transparency, reconstruction and development.
1. 31	65	Friends of Tara Mr Joe Secreve, Chairman	5	Mental Health Care	This family support group for patients with mental illness questions the procedures presently in place to commit psychiatrically ill persons and puts forward extensive suggestions to remedy the situation.

2. Professional bodies & tertiary institutions

Ref. Number	Submission Number	Author	No of Pages	Issue Raised	Abstract
2. 1	1	University of Zululand, Assistant Registra Mr C Y Mkhize	3	Systems & employment practices	The author lists issues which in his view create the perception that the Public service is inefficient and lacks co-ordination, responsibility and accountability. He suggests brief strategies to address the improvement of service delivery.
2. 2	5	P. E Technikon, Dept. of Public Management Dr V Hilliard	3	Local Government restructuring	The author expresses his view on a discussion document released by local government in the province on local government restructuring and recommends a suitable policy framework for local governance.
2. 3	8	University of the Western Cape Mr K Gottschalk	2	Public Protectors Office	Media reports , the author claims, suggest that only one in a hundred complaints are being dealt with and that the average response time to these complaints is one year. He recommends a drastic increase in resources, the use of rural telecentres and the utilisation of NGO's to improve the delivery capacity of this office.
2. 4	33	Breerivier High School Mr F Brown	1	Personnel records	A recommendation that computerised records of disciplinary matters, performance and health be maintained for all personnel and students, and that this be provided , on a mandatory basis, before appointments and transfers to any office/ post.
2. 5	43	South African Institute Of Management Service Mr E Morrison, President Pretoria	8	Effectiveness of the Public service	The organisation contends that government has spent in excess of R40 million on consultants for transformation without making progress in the furthering of the aims of transformation . He ascribes this to the government's failure to use its own internal Management Service and Work study resources. A substantial input dealing with factors impacting on service delivery efficiency is provided.
2. 6	51	Vista University (Bloemfontein) Mr K J Maputle	8	Vision, Accountability & Transparency; Transformation; Human Resource Management	The author predicates his input on personal assessment and analysis of the current Public Service and presents a pragmatic approach to issues.
2. 7	53	Transvaal Onderwysers-Vereeniging	2	Transformation & Service delivery	A list of areas in the administration of the education department which require transformation and reform. The lack of training and the departure of many qualified and experienced people is listed as a chief contributors to the current low level of quality service in education.
2. 8	62	Cape Nature Conservation Mr L Lourens	1	Transformation & Affirmative action	The view is expressed that there is a total lack of transformation in the department and that despite the departure of many top management officials no attempts have been made in bringing about representivity .

3. Public service officials/parastatals

Ref. number	Submission number	Author	No of Pages	Issue raised	Abstract
3. 1	9	Dept of Agriculture Dr D Arckoll	1	Administrative systems & practices	Observations and recommendations related to systems & practices are provided. These include a re-look at the current ratio of administrative people to technical people, promotion of technical people to management ranks, nepotism, lack of career pathing and low salaries. The loss of technical people following the introduction of the Voluntary Severance Packages is also recorded.
3. 2	14	Department not specified M Thusi, Free State	5	Affirmative action Recruitment practices	The view is expressed that service delivery to job applicants by part of the Department of Public Service and Administration is totally inadequate . He also calls for legislation to be introduced for Affirmative Action with merit being the only criterion for selection as well as staff development , especially in Information Technology.
3. 3	15 (a)	Ex Teacher, Eastern Cape Mr H S Sobekwa	6	General Service Delivery	The author who refers to himself as a "veteran and an intellectual" expresses the view that the lack of law and order has lead to the country becoming a "jungle". He quotes examples and makes a special plea for the demarcation of special areas for informal traders to improve "cleanliness" as well as more visible policing by a motivated police force
	15 (b)	Ex Teacher, Eastern Cape Mr H S Sobekwa	6	Voluntary Severance Packages	A recommendation that the high cost of Voluntary Severance Packages in the teaching profession could be contained through an incremental, phased approach over at least three years. Dissatisfaction with excessive delays in the payment of packages are also recorded.
3. 4	20 (a)	Prof. S Shabalala Office of Public Enterprises	20	Commercialisation of the Public Service	Report on the Commonwealth Policy Workshop on Commercialisation of Public Services ( London Business School 7-16th April 1977). Contains descriptive information on what took place at the conference and a more critical report highlighting theoretical and practical meanings and implications for Public Service reforms.
	20 (b)	Prof. S Shabalala Office of Public Enterprises	12	Privatisation	Paper delivered by the author at a Local Government Symposium at the BIFSA Conference Centre, 18th June 1997 The author presents different variants of privatisation as an approach to improving Public Service delivery.
3. 5	21	Mr Y Abba Omar, Corporate Communications ARMSCOR	58	Affirmative action	A study of Affirmative action in the South African Public Service submitted as part of the author's requirements for his advanced Executive programme at the Graduate school of Business Leadership at UNISA.
3. 6	24	Author requested that confidentiality be maintained Department of Housing, Free State	3	Employment/ Recruitment practices	The author questions whether his inability to secure a promotional post, despite his qualifications is as a result of "selective affirmative action" or nepotism. He questions the absence of a skills audit in the province and attributes the current lack of motivation in the province to the absence of promotional opportunities.
3. 7	32	G J Van Jaarsveld Dept. of Mineral and Energy Affairs ( retired)	3	Qualifications for employment & mine closure policy	The author, a retired mining engineer, outlines the benefits of appointing only B.Sc. Mining graduates to technical positions in the Department. He questions the current policy of reducing operations or closures of gold mines based on the fluctuations in the gold price given the unemployment which usually follows such action.
3. 8	34	M A Matabane Dept. of Finance, Northern Province	2	Employment practices/ service conditions	The lack of recognition and reward for the attainment of further qualifications is recorded as well as the lack of funding from government for its employees to improve their qualifications. The author asserts that supervisors feel threatened by their better qualified subordinates and then merely promote themselves which leads to de- motivation and the departure of bright young people from the Public Service.
3. 9	36	Dept. of Local Government Eastern Cape Province, Mr D B Stewart	12	Policy Issues	The author argues for a move from the present system of administration to one of " development administration". A summary of the proceedings at a two day workshop presented by a Prof. Swanepoel, head of the Department of Development , UNISA giving an indication of the type of government required to improve the circumstances of the impoverished masses, is provided.
3. 10	40	Department of Trade & Industry, Dr D Walwyn	4	Systems & practices	The author was seconded for a year to the Chief Directorate of Industrial promotion. He details his experiences and compare systems & practices in the Public service to that of the Private Sector. Management, Purchasing, Personnel functions, Electronic Data exchange and affirmative action are also covered in the submission.
3. 11	44	Victoria Hospital, Western Cape Ms H Ibach	2	Employment practices and policies	This author , a nurse at the hospital questions the number of positions at top management level and the continued application of the Voluntary Severance Package policy despite massive staff shortages. She recommends that prisons be converted to communal farms so that prisoners could obtain skills. Excess defence force members could also be deployed to the Department of Correctional Services.
3. 12	46	Department of Water Affairs, Northern Province Mr S M Modipa	1	Employment Practice & Service Conditions	The author , a security guard , complains about his salary of R270 per month and the lack of a uniform.
3. 13	48	South African Police Services Mr D C Burger	19	Information Technology ( systems & practices ,policy)	The author , head of National Information Systems for the South African Police Services deals with the role of IT in the department, the nature of problems being experienced and possible alternate solutions.
3. 14	49	Gauteng Provincial Government, Chief directorate: Information Technology Dr M Kahn	9	Information systems & technology	An overall situation analysis, SWOT analysis and framework for an Information Systems strategy.
3. 15	58	Dept. of Home Affairs Mrs O Kruger	2	Identity Documents & passports	The author ,a former employee in the Department of Home Affairs, suggests ways in which the control of the issuing of Identity Documents could be improved. She also questions the current provisions for the issue of emergency passports.
3. 16	61	South African Revenue Services Mr P Mekoe	1	Employment practices	A list of recommendations including the relocation of the responsibility for effecting all new appointments to the Office of the Minister of Public Service and Administration, the formation of a body to probe wrongdoing, and the introduction of a revolving loan scheme.
3. 17	64	Dept. unknown, Eastern Cape Provincial Government Ms N Sono	3	Employment practices	A recommendation that comprehensive information on all employees be recorded electronically and made accessible ,on line, to all employees in the Public Service. The practice of re- employing employees who had accepted the Voluntary Severance Package and the appointment to high office of people with a poor record of performance is questioned.

4. Business & labour

Ref. number	Submission number	Author	No of Pages	Issue raised	Abstract
4. 1	25	Partners in Change Mr B Sewell	28	Management Development & Performance Management	A coherent strategic framework for human resource development at both national and provincial level following an investigation which was based on the objectives of the White Paper on Transformation of the Public Service and the Green paper on Employment equity. The investigation was confined to practices in three European countries with a well established public service, yet who were seeking to enhance efficiency, effectiveness & equity in their public service management.
4. 2	31	Procurement & Review Engineers Mr L Kaplan	2	Service Delivery, Electricity	A call for rationalisation of the industry and a review of the role of the National Electricity Regulator.
4. 3	37	Amatola Project Engineers cc Mr J P Barker	2	Service delivery, Culture	A proposal that the development of a service delivery culture could be fostered through the introduction of Service directory containing information on all contact points in local and national government and the introduction of "Infoshops" in rural areas.
4. 4	41	Dr B Cronje Independent Training Consultant	7	Employment practices; Human Resources management	The author argues that goal attainment needs to comply with two requirements viz. quantitative requirements and qualitative requirements and illustrates how these can be dealt with in terms of Human Resources.
4. 5	45	D Kisule & Partners Mr D Kisule	2	Employment practices	A call for a move away from the current system of employees in the rating themselves to one of merit appraisals based on vertical lines of work and merit assessment. The establishment of a "Post Structure Committee" is also called for to ensure the uniformity of post structuring between the provinces.
4. 6	50	Infoplan Mr C Terblanche	7	Business Process	The author, who assisted the SANDF with the development of its business processes, provides a proposal for the development of improved process performance. He argues that the time has come to re-invent government through the optimisation of Business processes.
4.7	63 (a)	SACOB	14	Local Government	This submission a copy of SACOB's response to a discussion document released by the Ministry of Provincial Affairs on Local Government contains a response to the document as well as 18 recommendations to improve various aspects of local government. Topics covered include: - Vision Statements - Local Government in the context of globalisation - the role of Local Government - elections and administration - public - private partnerships - financial viability of Local Government - structures and accountability.
4.8	63 (b)	SACOB	10	Public sector transformation and restructuring	This submission deals with privatisation of the public service, priorities and performance, size and rationalisation, employment policies in the context of Affirmative Action and concludes that: - while there are no international standards for measuring a public service, the strength and efficiency of a country' s public service at all levels of government is a significant element in its attractiveness to investors and to its ability to compete internationally. - Restructuring the Public Service to meet the needs of the 21st century requires a radical rethink of its objectives and how to attain them. There needs to be less rules and more flexibility with a focus on accountability and meeting agreed customer needs . - Affirmative action as a policy designed to attain rapid equality must be implemented circumspectly and its application and duration must be carefully managed and designed to prevent racial polarisation.
	63 (c)	SACOB	13	Procurement reform	This submission , a copy of SACOB's response to the Government's Green Paper on Public Sector Procurement Reform endorses the four key principles in the Green Paper viz. that reform measures must accommodate: - good value for money - sound financial control - the censuring of all corruptions - measures to ensure that all tender participants are sound in terms of all their tax obligations, and recommends that simplicity should be included in these principles. The submission also deals with a general overview, good governance in procurement, the attainment of socio economic objectives through procurement, specific aspects of procurement reform and covers many aspect related to the WTO agreements.
4.8	64 (a)	COSATU	24	Comprehensive review of the Public Service	In this submission COSATU highlights the principles ,it believes, should inform the work of the Presidential Review Commission in comprehensively reviewing the Public Service. The submission covers the: - role of the State - fiscal policy and the Public Service - rationalisation and restructuring - management of the Public service - transforming Public service delivery - improving employment conditions - human resource development - labour relations - Public Service Employees' pension fund - representativeness and affirmative action - procurement strategies - public service and the provinces The submission concludes with recommendations on the way forward.
	64 (b)		15	Public service Education and Training	A copy of a submission, presented to the Department of Public Service, in response to a Green Paper on Public Service Education and Training released during the first half o 1997.The submission presents: - policy alternatives - training principles - priorities and guidelines - institutional arrangements - monitoring and evaluation mechanisms - institutional support programmes - finance It concludes with recommending that ABET be encapsulated in the implementation plan and a shift in the focus on post- matric and tertiary education .A detailed and separate ABET programme is called and that the public service competencies, identified in Appendix C of the Green Paper, be taken into account in designing such an ABET programme. A summary of recomendations is also provided.
	64 (c)	COSATU	15	Procurement Reform	In this copy of a response to the Green paper on Procuremnt Policy Reform, presented to the Department of Public Works , COSATU presents its views on: - using procurement to advance workers - prioritising employemnt creation - managing break-out employment - ensuring clean government through effective oversight - international factors A summary of recomendations dealing extensively with the promotion of worker rights is provided.

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