Today I presented to the Portfolio Committee of Defence and Military Veterans a summary and analysis of our 209/10 annual report. When we took over the Ministry of Defence and Military Veterans we were confronted by the 2008/09 annual report which had six qualifications.
Today we are able to report that as a team working on “operation clean audit” we have achieved only one qualification, which I can best call “historical technical qualification”.
I call this historical qualification because it relates to a matter that we have no control over this relates to international reporting systems and domestic reporting systems conflicts. The root cause of the qualification is the fact that as the South African National Defence Force (SANDF) we are required to account for asserts in line with NATO rules which are international rules.
Our Treasury disagreed and has been disagreeing since 1994 and in the mist of the disagreement and the expected reporting both domestically and internationally; the Auditor-General qualifies us. Today, after many sleepless nights and red bulls we are happy that together with the Auditor-General and the Accountant-General we have developed a system that accommodates both North Atlantic Treaty Organisation (NATO) and Treasury regulations which we will report within the 2010/11 financial year. This is will address the “technical qualification” for good.
The 2008/09 annual report had six qualifications, in summary they related to:
- Irregular expenditure for the AMG maintenance contract, the Board of inquiry was held and all necessary steps have been taken to ensure compliance.
- Non reporting of irregular expenditure, this has been addressed, it is now standard procedure to report irregular expenditure to treasury as soon as they are identified.
- The procument process and the payment to Airbus of R2.9 billion, as you are aware we have cancelled this contract and all payments have been stopped.
- The AG was also qualified the DOD for not making provision for liability from third parties, We now keep an active register of contingent Liabilities and is regularly evaluated.
- The last one related to the DOD not investing money in the Special Defence Account (SDA) and this was also address as Treasury had approved that funds from the SDA should not be invested.
We promised to work hard to eliminate them, and I can report today that except for the “technical” one we have eliminated all of them. To eliminate them we had to go to the root of the problems, understand the cause and find a sustainable solution to be implemented immediately.
In the 2009/10 Annual Report the Auditor-General also sighted what he called an “irregular expenditure” of about R1 billion majority of it caused by the fact that by the time of the submission of the report to Parliament the mandating committee had not sat to deal with the funds allocated for the new salary dispensation and awards. It was our understanding that the Interim National Defence Force Service Commission is the right body to deal with this matter.
I can confirm today that the mandating committee sat, and our allocation for the new salary dispensation and awards were approved. That irregular expenditure fell off on 11 October 2010 after the decision of the mandating meeting chaired by the Minister of Finance. The AG in his report also indicated that the decision of the mandating committee will address the irregular expenditure.
As we dealt with the qualifications raised by the AG in the 2008/09 report we also started a process to introduce new internal financial management systems. Internal controls are important. Irregular expenditure or expenditure that do not comfort with applicable rules must be detected before funds are spent. For this reason, we are implementing systems that allow us to do check and balances in the whole financial value chain. To monitor and evaluate whether officials are following rules and regulation we have also brought on board a Compliance Officer.
Gobodo Forensic Auditing Services has borrowed us one of their own to serve in that capacity until we find a permanent capable official. We have been working with Gobodo to ensure that we build the DOD to be the leader in public finance management. After eliminating all qualifications but the “unfortunate one” the Department of Defence is set for a clean audit in the 2010/11 financial year.
In nine years the DOD has never been in a better position than where we are today, this is the best financial report the DOD has ever received. Our understanding of our challenges and focussed plan to deal with them will only take us to greater heights.
Today we will also introduce the Defence Amendment Bill before the National Assembly. For the Department of Defence and the SANDF leadership this is an important step in their effort to introduce a new dispensation that deals with all issues relating to the SANDF. This amendment will ensure that we give soldiers the respect and dignity that shows that they are responsible for protecting our country, that they are the last line of defence for our democracy and freedom. Soldiers are not public servants, they are the man and women who have committed to give their life for their country.
With this amendment we will be able to remove them from being public servants in order to care and support them in a way that recognise the contribution they make to our country. With thank the Interim National Defence Force Service Commission for the work they have done to get us this far. The SANDF will always be indebted to all members of the Commission for their dedication and commitment in their execution of their tasks.
As soon as the law is passed and signed by the President, soldiers will immediately seize to be part of the public service, and all their condition of employments would be dealt with by the National Defence Force Service Commission. The SANDF has been trying to achieve this since 2004, we are happy today we are few steps from concluding this process for the benefits of our soldiers.
The Amendments also seek to allow the Commander in Chief, President Jacob Zuma to be able to deploy soldiers for other missions except war. Currently the legislation is not very flexible and does not allow the deployment of soldiers for developmental programmes for the benefit of our people.
This limits our ability to deploy to support municipalities, build community facilities and also cooperate with other government departments in the implementation of government programmes. As we set the agenda for the role of the SANDF in a developmental state we would like to build an SANDF that is involved in the implementation of programmes that benefits our people. The other amendment relate to the definition of the military command.
When one look back at was has been achieved in the 2009/10 financial year it is clear that the team in the DOD, lead by the Secretary of Defence (Acting SECDEF) and the Chief of the SANDF are in the right track to build a better department.
We are aware of the limitation and constrains of our budget. We are also seized with the impact of the skills we are borrowing to the private sector, and other issues affecting the SANDF, we are attending to all of them every day. But despite our challenges; we are still one of the best Defence Forces in the world. We have just deployed over 8 000 soldiers to support both the Confederation Cup and the FIFA World Cup 2010.
We have returned to protect the South Africa border with Mozambique, Zimbabwe and Botswana, from 1 April 2011, we will return to guard the South Africa and Lesotho border. Few weeks ago during the Public Servants strike we deployed over 5 000 military personnel to run 74 hospitals, every day we work with the South African Police Service (SAPS) and other law enforcement agencies to prevent crime.
Africa has just witnessed the inauguration of the President of Burundi, today kids in Burundi can play soccer in the street without fear of being kidnapped to be rebelled, thanks to the SANDF, and we are also flying the flag very high in the DRC and Sudan. I mention all of this such that all South Africans will know that in the SANDF they have very capable man and woman who are respect across the world. The United Kingdom (UK), Brazil, India, US Marines and all Defence Forces in Africa when they want real training exercises they come to us. This must make us very proud.
I am more than convinced that we are on the right route to address our challenges and South Africans can go to work and close their eyes in church knowing that we are on duty. To all the man and women in the SANDF who continue to make us proud, I say continue to do it the SANDF way.
