Programme Director,
Executives and Representatives of Constitutional Institutions and Schedule 3A Public Entities,
Representatives of the Office of the Auditor General,
Officials from National and Provincial Departments,
Distinguished Guests,
Ladies and Gentlemen
I am grateful for the opportunity to deliver the keynote address at this launch of the first Community of Practice for public entities.
The constellation of public entities represented here constitutes the important components that complete the institutional architecture of our developmental state. You will notice that I have used the word constellation which is a collective noun for a group of stars.
The function of stars is to radiate energy to the earth. They provide light and keep the earth warm. They are also useful for navigation and determining season and time on earth. Each one of the stars we see as well as those we cannot see with our naked eyes has a specific function, and it is in performing that function that the globe is kept in balance.
Ladies and gentlemen
This brief introduction leads me to ask the question: Are all our entities serving the purpose for which they were created? When citizens think of our institutions do they “see the light and feel the warmth” that stars send out? When our people find themselves going through a dark period, do they look to us for direction?
Could it be that the mere thought of some departments and public entities fill our people with anger, shame and disappointment? Put differently, are we meeting the expectations of our people or are we failing them?
I have no doubt that answers to these questions are mixed. There are those entities that are a shining light and then there are those that have not yet met the expectations of our people. This is the challenge we need to rise to; and it is one that we have overcome before.
Overview of our institutions
Let us remind ourselves that we have accomplished much since establishing democracy in our country. The Constitution of South Africa is hailed as one of the most progressive in the world. It set the foundations for the dismantling of the apartheid state and the creation of a democratic and all inclusive state.
We have established constitutional institutions such as the South African Human Rights Commission, the Office of the Public Protector, the Commission for Gender Equality and the Independent Electoral Commission to enhance accountability and promote good governance.
As we are all aware, since the first democratic elections in 1994, South Africa has had regular elections every five years. The democratic government prioritised the extension of basic services to the majority of the population who were deprived of these services under the apartheid system.
A credible and independent central bank has been established and an efficient tax administration put into place. Budget information has become highly transparent with South Africa maintaining a ranking in the top 4 since 2006, and, in fact, ranking third out of 102 countries in the Open Budget Index in 2015.
Government has progressed from measuring inputs and activities to measuring outputs and outcomes. We now have a long-term plan which provides the roadmap for our future with the goal of attaining our vision for the country - Vision 2030.
National Development Plan
In 2012, we adopted the National Development Plan (NDP), which charts the way forward for the country up to 2030. The Plan aims, amongst others, to address unemployment, eliminate poverty and reduce inequality by 2030.
However, it is not enough to simply have a long-term plan that tells us where we should be by 2030; it is crucial that we focus on the steps that need to be taken to reach the desired destination. In doing so, there are choices to be made.
Some of the choices are about the mode of transport to use. Are we going to ride a donkey or are we going to drive a car? What kind of nourishment do we need for the road? What will happen if the donkey gets sick or the car has a puncture? Who will we travel with?
In our case, we have to make choices between the different, competing priorities. While our resources are limited, the needs of our people continue to grow. We have to choose between consumption and investment. We also have to choose between different modes of providing services.
The establishment of the various public entities was the way our leaders and government chose to respond to the questions about the long journey. They made the choice that some services are best performed by departments directly while others would be better delivered by public entities drawing on the most effective approaches of the business sector while remaining accountable to the state.
Medium Term Strategic Framework
At the beginning of the current administration we developed and adopted the Medium Term Strategic Framework (MTSF) 2014-2019, which is a five year plan to implement the NDP. It also reflects the commitments made in the election manifesto of the governing party.
The MTSF sets out the actions that Government will take and the targets to be achieved by the end of this electoral cycle. It provides a framework for other plans of national, provincial, local government and public entities. We have identified 14 priority outcomes in order to overcome the challenges of poverty, unemployment and inequality by 2030.
These outcomes are:
- Quality basic education
- A long and healthy life for all South Africans
- All people in South Africa are and feel safe
- Decent employment through inclusive growth
- A skilled and capable workforce to support an inclusive growth path
- An efficient, competitive and responsive economic infrastructure network
- Vibrant, equitable, sustainable rural communities contributing to food security for all.
- Sustainable human settlements and improved quality of household life.
- Responsive, accountable, effective, efficient local government
- Protect and enhance our environmental assets and natural resources
- Create a better South Africa and contribute to a better Africa and a better world
- An efficient, effective and development oriented public service
- A comprehensive, responsive and sustainable social protection system
- A diverse, socially cohesive society with a common national identity
The role of public entities
The role of public entities in contributing to the achievement of the NDP and the MTSF cannot be over-emphasised. Public entities were established to perform work and render services on behalf of national and provincial departments, and are thus an extension of departments. They have an important role to play in the delivery of services.
Constitutional bodies are established to hold government accountable and true to the promise of our Constitution. In this regard, the work of public entities and constitutional institutions contribute to the achievement of the MTSF in different ways.
Public entities are established for a number of different reasons:
- As strategic, social or economic intervention by the State;
- To adopt commercial or business principles in service delivery when it is required; and
- To signal that there is a need for objectivity and more operational autonomy, yet retaining accountability in the delivery of services.
There are approximately 160 Schedule 3A public entities in the national sphere of government and 9 constitutional institutions, and each has a distinct role to play in the delivery of services and the governance that our people expect in a democratic dispensation.
Some public entities perform a regulatory function; others perform a service delivery function; and yet others perform a research function. One group of entities that comes to mind is the Sector Education and Training Authorities or SETAs as we call them. These institutions perform the important function of skills development that was identified as a key priority during the first administration led by President Mandela after 1994.
Skills development has been recognised as a priority for economic growth in South Africa, and for the general empowerment of our fellow citizens who were previously disadvantaged by apartheid policies. SETAs are required to ensure that appropriate quality training meets the agreed standards as outlined by the National Skills Development Framework, and caters for the training needs of new entrants to the labour market as well as currently employed workers who lack certain skills. Without adequate skills our economy will continue to disappoint and hold our development back.
Another example is the National Health Laboratory Service (NHLS) which is the largest diagnostic pathology service in South Africa with the responsibility of supporting the national and provincial health departments in the delivery of quality healthcare. The NHLS provides laboratory and related public health services to over 80% of the population through a national network of laboratories. The NHLS focuses on priority programmes which address HIV and tuberculosis (TB) with the purpose of making laboratory services accessible, affordable and relevant. Without this institution, our efforts to fight disease and ensure that our people lead long and healthy lives would be hamstrung.
For each of the 14 priority outcomes of our government there is a set of public entities that support the work of government. I want to reiterate that we cannot underestimate the important role that public entities play in the achievement of the priorities articulated in the NDP and the MTSF.
Governance in public entities
In order for our public entities to perform the functions they were established for, they need to be well managed and properly governed.
Most public entities have boards created to provide strategic direction and oversight to the institution. It is important that boards accept and understand their role of appointing Chief Executive Officers to run the institutions and to hold them accountable for the performance against agreed organisational objectives. Too frequently we find boards interfering in the actual running of institutions, something which violates the codes of good governance.
Public entities must act in the public interest at all times. Acting in the public interest requires a commitment to honesty, integrity, accountability, transparency, service excellence and comprehensive stakeholder engagement in order to improve decision making and accountability.
In addition, achieving good governance in public entities requires:
- Strong leadership which is associated with good performance of the institution;
- Defining outcomes in terms of sustainable economic, social and environmental benefits;
- Determining the interventions necessary to optimise the achievement of intended outcomes;
- Developing the capacity of the entity, including the capability of its leadership and individuals;
- Managing performance through internal control and strong public financial management in order to ensure value for money;
- Implementing good practices in planning, monitoring and reporting to fast-track service delivery; and
- Good working relationships between the Executive Management of the entity, the Board and the relevant oversight department.
Good governance in public entities encourages fiscal transparency, accountability and, most importantly, service delivery.
The Auditor General of South Africa, as you know, audits all Schedule 3A public entities and constitutional institutions. In the 2014/15 audit cycle, 12 percent of public entities obtained a qualified audit opinion with findings; 19 percent reported performance information that was not useful and 24 percent obtained findings on the audit of pre-determined objectives.
This is certainly not good news and we have to start asking difficult questions about how this situation can be turned around with immediate effect. Poor audit findings are a result of weak leadership, key positions not being filled, appointment of incompetent officials and, most importantly, the consequences of inadequate planning and monitoring systems which result in poor performance.
On a slightly positive note, 11 percent of public entities received unqualified audit reports for three consecutive years. Examples of such entities are the Human Science Research Council, BANKSETA, Legal Aid South Africa, and the National Research Foundation, among others. These entities need to be commended and they certainly can provide some lessons for others.
Establishment of the Community of Practice for Public Entities
Today, we are establishing the first Community of Practice for Public Entities. This is the first of many learning platforms that will bring various stakeholders together to discuss and share information in order to build and improve capacity specifically regarding the planning, monitoring and evaluation functions.
Departments and entities have their own systems and are at varying stages in institutionalising planning, monitoring and evaluation. Ideally, and in line with the Public Finance Management Act and related Treasury Regulations, oversight departments should provide direction and support to public entities in respect of planning and financial and non-financial performance. In most instances, departments do not provide support to their public entities apart from transferring funds.
There is a possibility that some entities may become redundant over time if they do not constantly refine their processes and practices to ensure that their work remains relevant and true to the mandate they were given. Planning is absolutely essential if entities are to continue to be relevant. The often cited quote from Alan Lakein “Failing to plan is planning to fail” sums it up well.
To ensure that we do not plan to fail, we need to give attention to five tasks:
- Firstly, we need to strengthen the quality of strategic and annual performance plans produced by schedule 3A public entities and constitutional institutions.
- Secondly, we need to provide a platform for public entities to primarily focus on strategic planning, annual performance planning and performance information management.
- Thirdly, we need to institutionalise budget programme structures for public entities to inform planning, monitoring and evaluation. This means we need to strengthen performance information management within public entities through the planning, monitoring and evaluation processes with particular emphasis on the development, collection, storage and reporting of performance information.
- Fourthly, we need to strengthen support by national departments to public entities.
- Finally, we need to share best practice and benchmarking information among public entities as no such platform currently exists.
The role of the Department of Planning, Monitoring and Evaluation
The DPME focuses on planning, monitoring and evaluation through implementing a number of programmes. It provides guidance to departments on how to improve the quality of the plans they produce and ensure greater alignment with the National Development Plan. The current administration has committed to institutionalising planning in government over the remaining term.
DPME also monitors the implementation of the Medium Term Strategic Framework, through programmes such as the Frontline Service Delivery Monitoring, the Presidential Hotline and Community Based Monitoring, and through the introduction and institutionalisation of evaluations and a Management Performance Assessment Tool (commonly known as MPAT).
As part of the engagement processes with departments and also based on the Auditor General’s report, a greater need was identified for DPME to provide technical support and guidance on planning, monitoring and evaluation processes to public entities as well as their oversight units within the designated national departments.
Public entities often receive support on an ad hoc basis as and when they request it and it is envisaged that this Community of Practice will be a mechanism to provide the required support at more regular intervals.
DPME also performs an evaluation function. While monitoring tracks if you are on the course you set, evaluations are a means of determining what is working and why, and what impacts are being achieved. It, thus, provides much deeper insight which is needed to improve the performance of policies, programmes and systems, as well as to improve accountability for the difference public funds are making.
The Community of Practice will provide a platform for institutions to share their experiences and approaches to improving the quality of performance information and on managing this information in order to inform planning, monitoring and evaluation. The community of practice will focus on the creation of learning networks for public entities, strengthen performance information management within public entities, institutionalise budget and programme structures and share best practice information among public entities.
Ladies and Gentlemen
Addressing a meeting between Government and Business Leaders in February 2013, President Zuma said the following about the NDP: The Plan has been adopted as a National Plan for the whole country. It is our roadmap for the next 20 years. All the work we do in government is now part of the comprehensive National Development Plan, including all operational plans be they social, economic or political.
This instruction is very relevant to us today. You may not agree with every proposal and every word in the NDP but our job is to implement it. Improving the way we plan, monitor and evaluate our programmes is absolutely critical to effective implementation of the NDP.
I wish you all successful and productive engagements and I am sure that this Community of Practice will take us to greater heights in accelerating service delivery in South Africa.
Thank you.
