Balfour to the Portfolio Committee
2 May 2006
Good morning Chairperson,
Members of the Portfolio Committee,
Members of the media and other interested citizens,
I have a delegation here today consisting of Deputy Minister Loretta
Jacobus, Commissioner Mti, Chief Deputy Commissioner (CDC) Finance in
Department of Correctional Services (DCS), CDC Corrections, CDC Central
Services in DCS, DC Compliance and Management Support in DCS, Department of
Public Works and National Treasury.
I welcome this opportunity to lead the delegation of DCS, National Treasury
(NT) and Department of Public Works (DPW) to brief your Portfolio Committee and
to answer all questions in relation to two issues â
* The virement and reprioritising processes within DCS in 2005/6 and our
expenditure in relation to facilities and security in that year, and
* The process of procuring 4 new generation correctional centres.
Let me first speak to you as a fellow MP, I will then speak as the Minister
of Correctional Services.
Our Constitution outlines very clearly the powers of National Assembly in
relation to its legislative power in relation to legislation including money
bills. It furthermore states that the National Assembly must provide for
mechanisms to ensure that all executive organs of state in the national sphere
of government are accountable to it and to maintain oversight of the exercise
of national executive authority, including the implementation of legislation
and any organ of state. The manner in which we function then, as members of the
Portfolio Committees of Parliament, is a constitutional obligation and should
be conducted in an appropriate manner consistent with the status of the
Constitution.
It is an important principle of our Parliament that these responsibilities
are exercised in the full scrutiny of the public and it is therefore incumbent
on us as Members of Parliament to conduct ourselves in a manner that is not in
any way going to mislead the public. We have as MPs a critical responsibility
to pick up on all allegations of impropriety in all spheres of government and
to investigate the veracity of such reports but it is critically important that
we hold our judgments until the full facts have been placed in front of us and
explanations of these facts adequately interrogated. That is what I as an MP
believe to be our function as public representatives, custodians of the
interests of the citizens of this country.
We have in South Africa a vibrant and independent media with an important
role in investigative journalism and exposing things that are to the detriment
of the public interest. But we must also recognise that the ethics, interests
and obligations of Members of Parliament and of journalists are very different.
As a public representative it is highly risky and very inappropriate to be
driven by what is reported in the news papers. As MPs we should recognise that
the media can be driven by agendas of those who feed them information and it is
important for MPs to be vigilant in relation to agendas of others, ensure that
they are able to rise above being manipulated by agendas of others and ensure
objective and professional oversight. Furthermore the public utterances of MPs
should be based on sound independent investigation and analysis of the facts
and explanations and not on the basis of âfactsâ presented by others without
the hearing of the other side of the story
Now let me speak as the Minister of Correctional Services.
I must firstly alert the Portfolio Committee to various developments in the
Department over the last few years that may well have antagonised various
interest groups. I raise this in order for the Portfolio Committee to be better
equipped to interpret events and statements by various role players. In the
past five years, DCS has significantly closed the space for corruption and
irregularities in the field of Information and Technology (IT) and have
significantly addressed the unnecessary plethora of divergent applications in
our IT environment. We have also systematically made progress in the
procurement field of ensuring that we enable black economic empowerment (BEE),
resulting in times at traditional service providers to the Department no longer
having that secure space for trading.
We have also taken direct responsibility for the procurement of security
technology, shifting this function from Department of Public Works (DPW) and in
the process also ensuring that new service providers have opportunities to be
considered.
Furthermore, we have made a significant policy shift away from further
operational public private partnerships in correctional centres as provided for
in the Act, on the basis of the costs of the current two, on the basis of
international debate about the constitutionality of private companies being
responsible for the incarceration of citizens and the basis of the assessment
that in a number of respects that current situation is not enabling our
management of the correctional system in line with our White Paper and enabling
us to address critical problems such as overcrowding.
All of these processes have had a direct impact on the financial interests
of a role of role players and there is evident dissatisfaction with the
direction that we have taken.
As Minister of Correctional Services, I am completely satisfied that the
direction that we have taken on these issues is correct and that through these
actions we are creating a DCS with better institutional capacity to deliver on
the White Paper. I have little intention to be swayed by the interests of
individual service providers as I believe the mandate I have been given and
which I believe is shared with the Portfolio Committee is to ensure that South
Africa has a correctional service that can contribute to maintaining and
protecting a just, peaceful and safe society by enforcing sentences of the
courts in the manner prescribed by our Act; detaining all prisoners in safe
custody whilst ensuring their human dignity; and promoting the social
responsibility and human development of all prisoners and persons subject to
community corrections. In short a correctional service appropriate to the
criminal justice system that our democracy requires.
Moving to the issue of virement and reprioritising
The Portfolio Committee should understand clearly before this presentation that
reprioritising of expenditure and virement are legitimate financial management
processes, which take place within guidelines laid down by the Public Finance
Management Act (PFMA) and the National Treasury.
During the course of the financial year there are quarterly shortfall and
surplus exercises that enable the Department to shift money from areas in which
there are savings to areas in which there are. These processes start by
reallocation of funds within a budget programme of sub programme and then
between programmes. There are certain restrictions on re-allocations â money
allocated for personnel salaries cannot simply be re-allocated without approval
of the National Treasury, monies allocated to capital works programmes cannot
be shifted outside of the infrastructural programmes of the Department. There
are parameters laid down by the Treasury for how all of this is done.
There are virement processes that have to be reported by the Accounting
Officer to the National Treasury, the Treasury has the responsibility to ensure
that such virements comply with the regulations and to alert the Accounting
Office and the Minister if such virements are not appropriate. The PFMA
provides the procedures for Accounting Offices to utilise savings and to make
virements between main divisions within votes in Section 43 of the PFMA. The
Virements approved by the Accounting Officer are submitted each time to the
National Treasury and the National Treasury is responsible for sending a query
to the Accounting Officer on any matters that they are not comfortable with.
The Treasury Regulations on the PFMA as published in the Government Gazette 15
March 2005, indicates that â6.3(c) allocations earmarked by the relevant
treasury for a specific purpose (excluding compensation of employees) may not
be used for other purposes, except with its approvalâ. The money allocated for
capital works programmes falls into this category.
The Commissioner has made virements in terms of the PFMA twice in 2005/06
and both virements were recommended by all the CDCs and forwarded to the
National Treasury. No queries have been received from the National Treasury. In
the virements which were made, there was no Virement to the R1 178 950,000
allocation for buildings and other fixed structures. The only Virement in the
Capital Assets section was made with the permission of the National Treasury to
shift a saving from compensation of employees budget to Machinery and Equipment
that enabled the procurement of improved security fencing and equipment for
correctional centres.
It is my hope that the explanations that you receive from the Department
today will assist you to better understand the processes of budget allocation,
reprioritising and virements and to have assured yourselves that the Department
has functioned responsibly in relation to financial management.
In relation to the new generation correctional centres, I want to assure the
Portfolio Committee that the programme to build the current four and the next
four is our course, albeit with some delays. I want to emphasise however that I
am convinced that the delays have been the result of the complexity of the
co-ordination of procurement of capital works through the three departments
represented here today and the meticulous manner in which the Commissioner has
sought to ascertain accurate information before making decisions involving
massive amounts of our capital works allocation.
We have been faced with a desire to the correctional centres built
overnight, with a commitment to ensure a properly managed procurement and
expenditure system and the two at times are in contradiction. It is the
Accounting Officerâs responsibility to ensure that, before taking any major
financial decision, he and his senior management are comfortable with the
financial and costing information that is presented to them and the processes
that are taking place.
However the Commissioner has limited control over the function of the
procurement and delivery process in relation to capital works which lies with
DPW. The DCS has raised this issue in the Medium Term Expenditure Committee
(MTEC) presentation to the National Treasury in September 2005 and in the last
nine months has interacted very directly and assertively with DPW to address
some of the more obvious manifestations of this problem. The CDC Finance has
systematically been addressing the lack of control over budget expenditure due
to decisions that have lain with or been appropriate by DPW.
Let me conclude my opening remarks, by saying that the last two months has
been a bruising time for myself, my Deputy Minister and for my Commissioner â
both at the hands of the media and at the hands of some Members of Parliament.
It is my hope that we will all learn how to handle our responsibilities in a
manner that does not prematurely result in attacks on individuals. Let
oversight of the responsibilities of us as Ministers, as Accounting Officers
not be conflated with premature judgments and accusations. Let the very
important oversight responsibilities of the National Assembly not be sullied by
premature judgments.
The Portfolio Committee is very aware of the fact that the capital works
programme of the Department has been a particularly complex one and one that
the Department led by this Commissioner both under the former Minister and the
current Minister have been trying to put onto an even keel.
We will continue to brief the Portfolio Committee on:
* the status of the delivery of the four current New Generations Correctional
Centres.
* the costing challenges of the procurement of correctional facilities, while
also being mindful that at times due to procurement processes, that briefings
will be of a confidential nature. It must be noted that Correctional Services
has concerns over commenting publicly on sensitive procurement issues and will
ensure that the balance between ensuring uncompromised procurement processes
and accountability to the Portfolio Committee is found.
* the progress in improving the systems to ensure appropriate control over
budget expenditure of our capital works allocation while procurement processes
lie with DPW.
We trust that the Portfolio Committee will on the basis of the facts
presented today ensure that the public image of the Commissioner as a
responsible Accounting Officer who fully respects his accountability to
National Treasury, to the Portfolio Committee, to Parliament through his
Minister and to Cabinet is upheld. We trust also that the Portfolio Committee
will see its way clear to having the allegations against myself and the Deputy
Minister withdrawn.
I now hand over to the Commissioner to indicate how the presentations will
be made today.
Thank you.
Issued by: Ministry of Correctional Services
2 May 2006
Source: Department of Correctional Services (http://www.dcs.gov.za/)
