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DEPARTMENT OF DEFENCE FEEDBACK ON PCD REPORT: DOD ANNUAL REPORT FY2005/06 (13 March 2007)

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Title: DEPARTMENT OF DEFENCE FEEDBACK ON PCD REPORT: DOD ANNUAL REPORT FY2005/06 (13 March 2007)


1
DEPARTMENT OF DEFENCE FEEDBACK ON PCD REPORT
DOD ANNUAL REPORT FY2005/06 (13 March 2007)
2
Aim
  • To present to the Portfolio Committee on Defence
    feedback on the Annual Report 2005/06 tabled on
    12 September 2006

3
Decision
  • It is requested that the Portfolio Committee on
    Defence approves the information provided as a
    subtantative response to the feedback report.

4
Defence Administration
  • Para 2.2 Approved document on the IFMS system
    developed in collaboration with the National
    Treasury
  • The National Treasury has developed a plan for
    the implementation of the NT IFMS Project.
  • The scope of the DODs involvement is as follows
  • - Participate as part of the adjudicating team
    for the application development toolset tender.
  • - Participate in the formalisation of the user
    requirement statement for the asset management
    solution as the lead department for supply chain
    management
  • - Participate in the finalisation and
    procurement of the HR application of the IFMS
    solution
  • - Participate in the development of the
    financial management application and the other
    components of the final integrated IFMS solution
  • The above was confirmed during formal
    discussions and work sessions between the DOD,
    the National Treasury and the SITA.

5
Para 2.2 Approved document on the IFMS system
developed in collaboration with the National
Treasury Cont.
  • Cognisance should however be taken of the fact
    that the National Treasury has placed a
    moratorium on the renewal or enhancement of any
    information system that has a financial
    implication in government.
  • DOD is dependant upon the NT plan and its
    ability to deliver integrated financial
    management solutions in collaboration with the
    public sector as the user community.
  • This dependency is a risk to the DOD as it has a
    direct effect on the ability of the DOD to
    address either qualification or emphasis of
    matter by the Auditor-General

6
Defence Administration
  • Para 2.2 The Committee needs a presentation on
    the status of the White Paper on Peace-Keeping
    Missions and the role that Foreign Affairs are
    playing in compliling this document
  • The 2007 Government Programme of Action sets out
    the objective of updating the White Paper on
    Peace Missions.
  • DFA Role
  • The Department of Foreign Affairs is the lead
    Department, SAPS and the DOD are supporting
    departments. During 2006, the DOD was part of the
    drafting team and provided inputs of the DFA on
    the White Paper as requested.
  • Status The Department of Foreign Affairs has
    subsequently submitted a Cabinet Memorandum on
    the Review of the White Paper on Peace Missions
    on the IRPS DGs and Cabinet Committees. The
    White Paper was referred back for further work as
    directed by the Cluster.
  • At the IRPS DG Cluster of 06 March 2007, the DG
    DFA undertook to expedite the submission of the
    Revised White Paper on Peace Missions to Cabinet
    during March 2007.
  • The DOD recommends to the Committee that
  • - A joint sitting of the Committees having a
    portfolio concerning Foreign Affairs, Defence and
    Safety and Security be held, and
  • - the Minister of Foreign Affairs be requested
    to provide a briefing on the Revised White Paper.

7
Defence Administration
  • Par 2.2 PCD Recommendation Planning Enabler
    Tool (GEJIMA) should be implemented in near
    future
  • GEJIMA system is being implemented in a phased
    approach
  • PHASE 1
  • Capturing of Service/Divisions Level 2 Plans
    on GEJIMA system on track
  • Training of Planners/Reporters to use GEJIMA
    system - continuous process
  • Quarterly Reporting All FY06/07 quarterly
    reporting was captured on the system
  • PHASE 2 (Phases 2 and 3 - concurrent phases)
  • Improving GEJIMA to accommodate customer
    requirements to stabilise system in
    process
  • Realigning GEJIMA system with Structure
    Management Control System, Financial
    Management System adjustments once new
    structural changes are captured
  • PHASE 3
  • Provide integrated DOD planning and controlling
    solution
  • Study to determine interfacing requirements
    between other computer programmes and tools used,
    in addition to GEJIMA such as Activity Based
    Costing tool
  • Determine final DOD user requirement
  • Decision to be made either to further develop
    GEJIMA system to integrate all stand-alone
    programmes/tools or to buy best programme
    commercially off the shelf and develop to address
    full DOD requirement

8
Defence Administration (continued)
Par 2.2 PCD requested feedback on the issue of
lack of capacity and loss of skills in Military
Legal Services within 6 months Resignation of
Skilled Members
Attrition last 2 years Attrition last 2 years Attrition last 2 years Attrition last 2 years
Male Female Total
African 5 2 8
White 12 18 30
Coloured 0 0 0
Indian 1 0 1
Total 18 20 39

33 Military Legal Practitioners
  • The following Impact on Attrition (Causes for
    Attrition)
  • High demand for highly experienced SANDF
    members by other departments
  • Remuneration dispensation for law professionals
    in the DOD and other State Departments
    differ. They do not follow the same progression
    principles and/or appointment levels
  • A lack of upward mobility once salary level 11
    has been reached. New appointees require 5-6
    years to reach experience level of service
    rendering
  • Members feel insecure and leave the Legal
    Service Division as Draft Military Discipline
    Bill proposes abolishment of certain posts
    such as review counsel

9
Defence Administration (continued)
  • Causes for lack of capacity
  • No provision made on structure for
  • Operational Law Support during external
    deployments (yet 8 9 military legal
    practitioners deployed at any given time)
  • Posts for internal support personnel Finance,
    Human Resources, etc
  • Posts for interpreters- appointed on ad hoc
    basis sometimes affecting service delivery
  • Unstaffed and unfunded posts due to a lack of
    funds approximately 20 vacant posts
  • Due to transformation imperatives junior
    members with potential and not the ideal level of
    experience will only gain experience over
    time
  • Corrective Measures
  • Re-structuring of the DLSD to create additional
    posts is a priority
  • Amendment of the Personnel Management Code in
    order to make it flexible and introduce
    incentives to retain skilled staff
  • Ensure that Mobility Exit Mechanism is not
    afforded to members to the detriment of Division,
    were it is unavoidably succession planning would
    be utilized to ensure skills are transferred.
  • Funds have been requested through the
    Departmental Planning and Budgeting Committee to
    fund vacant posts
  • Optimal utilisation of available personnel
    including Reserve Force members to ensure
    service delivery

10
Force Employment
Par 2.3 PCD supports the rejuvenation strategy
to built a young dynamics force and to build the
capacity of junior leaders. The Committee
requested a presentation on the plan of action
with regard to build the capacity of the SANDF
  • Rejuvenation of the SANDF
  • Background
  • DOD HR Strategy 2010 requires the rejuvenation
    of both the Regulars and Reserves
  • The MSDS provides rejuvenation from the
    bottom-up
  • Two MSDS imperatives
  • Rejuvenation
  • Development opportunities for the youth
  • Rejuvenation results are demonstrated eg annual
    Ex SEBOKA
  • In terms of the 2007 Programme of Action for
    2007, intensification of force rejuvenation lead
    by the DOD is a priority that has been identified
    within the JCPS Cluster

11
MSDS Growth Path


12
Improved Rank-Age Compliance of Privates
13
Force Employment (continued)
  • Rejuvenation Sustainability and Personnel Flow
  • Up to now, rejuvenation concentrated on the
    Regulars rejuvenation requirement
  • 6 631 (75,1) out of 8 463 MSDS members
    received Regular contracts (Core Service
    System)
  • Only 1 233 potentially available for Reserves
  • The DOD can sustain annual MSDS intakes of 4
    500 (inflows must balance outflows)
  • Insufficient capacity (training, accommodation,
    instructors, operating budget) limit intake size
  • Larger MSDS outflows to Reserves will enhance
    capacity for bigger intakes (not over short
    term
  • Planning Considerations
  • Size of DOD HR composition is a function of
    force design, force structure, post
    establishment sustainability
  • Revised force design calls for 85 375 full-time
    HR
  • Will be staffed by
  • 70 000 Regulars (uniformed and civilian)
  • 15 375 MSDS
  • MSDS intakes will therefore have to expand to 7
    687 per year, of which 4 500 per year is
    currently funded

14
Force Employment (continued)
  • Planning Considerations (continued)
  • Appointments of MSDS members in the Regulars
    (Core Service System) should not exceed the
    annual personnel outflows in the Regulars
  • Approx 50 of each MSDS intake should therefore
    be appointed in the Reserves after completing
    MSDS service
  • As MSDS outflows to the Reserves increase, the
    size of intakes will progressively increase
  • Conclusion on Rejuvenation
  • Optimal SANDF rejuvenation throughout all ranks
    is a continuous endeavour and dependant on
  • Changing force design structure requirements
  • Natural outflow of members
  • Training capacity
  • Career management
  • Sustainability of new intakes
  • Significant progress has already been made to
    rejuvenate the junior ranks, especially Privates
  • Rejuvenation will continue at the rate of 4 500
    new members per year until the flow of MSDS
    members to the Reserves increase or the Defence
    Budget can be supplemented for additional
    capacity

15
Landward Defence
  • Par 2.4 PCD throughout supports the allocation
    of more funds towards
  • C Army expressed his appreciation to the PCD for
    supporting more funds to ensure a viable SA Army
    able to execute Government Objectives
  • Affordability of the SA Army Reprioritising vs
    the Operating Budget
  • Personnel budget absorbs the bulk of the SA
    Armys budget
  • Actions implemented by the SA Army
  • SA Army has initiated the works regiment
    concept which is now being explored by the DOD
  • SA Army is investing limited operating funds
    available for training mainly on MSDS intakes
    and basically no continuation training for the
    Regular Force (already trained) is done
  • Members are trained to the level required for
    Peace Support Operations and funding for
    conventional training is limited to a bare
    minimum to only retain a small core growth
  • The SA Army is cannabalising its Prime
    Mission Equipment to reduce maintenance costs
  • SA Army actively participated in the DOD
    Workgroup on the Update of the White Paper on
    Defence 2006
  • DOD approach will be to engage the determinant
    clusters so as to solicit support for additional
    funding for rejuvenation of the landward Defence
    Programme with specific emphasis on the
    replacement of the prime mission equipment.

16
Landward Defence (continued)
  • State of Facilities
  • SA Army is to a large extent dependent on PWD
    for maintenance of facilities (major works)
  • To address basic Occupational, Health and
    Safety and MSDS requirements approx RB1,6 is
    needed. SA Army provided from own operating
    funds RM20,6 for day-to-day maintenance and
    RM24 for larger projects
  • Prime Mission Equipment
  • Limited funds available concentrated on
    maintenance of operational deployable vehicle
    and weapon systems. Additional RM150 received
    in FY2006/07 assisted to a large degree
  • SA Army invested heavily in acquisition of
    simulators for driver training and weapon
    systems (Armament Acquisition Projects as well
    as from operating funds)
  • SA Army in continuous liaison with Joint
    Operations Division to acquire more funds for
    maintenance of prime mission equipment returning
    form operational deployments
  • SA Army participating in DOD process of
    reprioritisation of the SCAMP and has finalised
    its approach to and plan for the Modernisation
    of Landward Systems

17
Landward Defence (continued)
  • Ammunition
  • Joint Operations Division will refund the SA
    Army for the replacement of ammunition used in
    external deployments. RM139 will be provided
    over a period of time. Approximately RM40 will
    be received in FY2007/08
  • Joint Operations will refund any ammunition
    replacement in future
  • In December 2006 the SA Army provided the DOD
    with a letter from DENEL, stating their
    readiness and ability to produce ammunition to
    the value of RM300 should the order be placed
    before 31 March 2007
  • Revitalisation of SA Army Technical Support Corps
    (TSC) Capability
  • SA Army allocated RM54 to the revitalisation of
    the SA Army TSC from the RM150 additional
    allocation for the maintenance of vehicles
  • SA Army reestablishing the TSC system in the SA
    Army and the MOD has approved the transfer of
    the TSC Training Centre and TSC Reserve Units to
    the SA Army with effect of 1 April 2007
  • Retention of Skilled Personnel
  • The SA Army initiated an incentive to retain
    scarce skilled personnel. It has been accepted
    by and is presently being implemented within
    the DOD. However, the SA Army does not have the
    funds to implement the initiative in the SA
    Army
  • The SA Army has substantial increased its
    funding for advanced and technical training at
    external institutions

18
Air Defence
  • Par 2.5 PCD throughout supports the allocation
    of more funds towards
  • Retention of Skills and Experiences Shortages
  • SA Air Force is establishing a three-pillar
    approach to resolve retention issue in medium to
    long term
  • Pillar 1. Improved recruitment and selection
    ensuring only candidates seeking a long-term SA
    Air Force career. Will address current
    phenomenon where members join the Air Force to
    acquire scarce skills and then move to
    alternative employment at the earliest
    opportunity
  • Pillar 2. Improved career management of
    members removing obstacle to self-fulfilment.
    Members will work in an enabling environment,
    conducive to a high level of personal
    development, satisfaction and performance. It
    will make members less likely to leave the
    organisation in search of alternative
    employment
  • Pillar 3. Remuneration at a level where
    specialised members are fairly and reasonably
    compensated for their specialised skills, and
    where the difference between military and
    commercial remuneration is not so disparate that
    members wish to change careers for financial
    benefit only. Operating budget is being
    significantly depleted to fund improvements in
    incentive schemes to retain scarce skills. An
    intervention at the level of National Treasury
    and the Department of Public Service and
    Administration is required to find a solution

19
Air Defence (continued)
  • Deteriorating Aircraft Systems which affect
    Training of Personnel
  • Detailed plans addressing critical system
    integrity issues are being implemented. Some
    examples are
  • A Policy Proposal, for funding an avionics
    upgrade on the Astra basic training aircraft will
    be presented at the June 2007 Departmental and
    Budgeting Evaluation Committee
  • A proposed holistic approach to resolve the
    requirement for air transport affecting both the
    B707 and C130 systems, is due to be presented
    to the Operations Staff Council in the near
    future
  • The Cessna 185 system, presently not
    maintaining flying status, will more likely be
    phased out earlier than the planned date of
    2009. Alternative solutions to meet operational
    requirments are being considered, such as
    utilising the Air Force Reserve Squadrons and the
    C208 (Cessna Caravan) fleet to take over the
    Cessna 185 functions
  • SA Air Force Force Preparation and Force
    Employment Funded at Cost of Longer Term Need
  • A number of initiatives are in progress to
    improving resource balancing in the SA Air Force
  • An example is the present approach of meeting
    basic helicopter flying training requirement
    through outsourcing the training at a greatly
    reduced cost and with excellent results
  • A study has been completed to present the
    first phase of basic flying training at a
    low-cost, side-by-side, basic flying
    training. This will relieve the pressure on the
    Astra fleet, allowing the SA Air Force to
    address some of the longer-term system integrity
    requirements.
  • Initiatives are underway to reduce the
    footprint and cost drivers of the Air Force by
    amalgamating, relocating or rightsizing of
    units and functions. Eg the possible move of the
    Air Force Gymnasium from its present dolomite
    infested location to the Boston facility at
    Hoedspruit (presently partially utilised by
    the SA Police Service)

20
Maritime Defence
  • Par 2.6 PCD supports the integration of the
    Strategic Defence Packages (SDPs) and the
    allocation of more funds to retain the technical
    skills and expertise of personnel in the SA Navy
  • Integration of SDPs
  • SA Navy welcomes support in ensuring the SDPs
    receive appropriate attention to be fully
    integrated in the Navy
  • SAS AMATOLA and SAS MANTHATISI commissioned
    into the SAN during FY05/06
  • Additional funds (RM26) received during this
    period for integration, utilised for test
    equipment, spares, quayside pontoons and
    certain contractual obligations
  • SA Navy still learning with regards to SDPs and
    all aspects of the integration
  • Main cost driver is support contracts and
    spares for these vessels
  • Retention of Technical Skills and Expertise of
    Personnel
  • SA Navy did not receive sufficient funds for
    retention of expertise.
  • In FY2000 introduced incentive schemes for
    retention of combat officers and technical
    personnel
  • From 2000 to end FY2005/06 contracts awarded to
    combat officers and 623 technical personnel.
    This effort will be continued in the future
  • SA Navy cannot meet remuneration paid by
    private sector always loss of skilled personnel
  • SA Navy decided that 40 of its allocation to
    operating the SA Navy and 60 to personnel costs
    ratio will ensure keeping ships at sea
  • DOD Instruction 66/67 remunerative and
    compensatory allowances for scarce musterings
    will assist in retaining personnel

21
Military Health Services
  • Par 2.7 PCD throughout supports the allocation
    of more funds towards
  • Rejuvenation of the Health Care Professionals on
    All Levels
  • The community service system provides SAMHS
    with healthy flow of young (new) health
    professionals
  • Support of PCD requested in improving
    remuneration of all health professionals in the
    military to be able to retain best candidates
    for the DOD as SAMHS cannot compete with private
    sector remuneration for health professionals
  • The MOD made a principle decision
  • Health professionals in uniform shall receive
    an allowance for being deployable
  • To add an incentive that is not available to
    the public health sector
  • Final decision pending and funding of
    allowance needs to be sourced with support of PCD

22
Funding for Health Equipment (Static and Mobile
  • Funding for Health Equipment (Static and Mobile)
  • SAMHS Logistic Master Plan informs funding and
    equipment for static infrastructure. Acquisition
    through structured replacement cycle allowing
    for reprioritisation
  • However, the SAMHS does not sufficient funding
    for health equipment renewal to a world class
    standard
  • SAMHS has limited capabilities with regard to
    mobile hospitals with only one functional. There
    is a critical need for additional field hospitals
    to meet employment requirements
  • Funding implications occur where health equipment
    require specialised localities (x-ray rooms) or
    structural changes to accommodate new generation
    health equipment. Additional funding required
    for facilities although health equipment remain
    interdependent
  • DOD will engage the determinant clusters so as
    to mobilise support for additional funding for
    rejuvenation of the Millitary Health Support
    Programme with specific emphasis on the
    replacement of the prime mission equipment and
    infrastructure.

23
Defence Intelligence
  • Par 2.8 The lack of Personnel and also the
    location of the Defence Intelligence Headquarters
    need urgent attention. The Committee requires a
    briefing within 2 months on whether the
    Intelligence Headquarters has moved
  • Lack of Personnel
  • Challenge. Continued loss of experienced
    personnel to other Departments
  • Measures Taken
  • Recruitment of members from MSDS (at the end of
    their MSDS period) during FY06/07. Twelve SA Navy
    members and applications for security clearances
    put in process. Appointment only after positive
    outcome of security clearance.
  • Recruitment of graduate MSDS members during
    FY2007/08
  • Recruitment of under-graduates from South
    African Universities during the FY2008/09
  • Location of Defence Intelligence Headquarters
  • Relocation of Defence Intelligence Headquarters
    was handed to National Department of Public
    Works (NDPW) under the RE-KGABISA project for
    option analysis
  • This avenue exceded the agreed deadline and
    project was subsequently handed to NDPW to
    manage the option analysis through its in-house
    capabilities. Result is expected to be completed
    by 15 April 2007.
  • Defence Intelligence confirmed preferred option
    is SA Defence Intelligence College (RADCLIF)
  • Date for briefing to be determined (June/July
    2007)

24
Joint Support
  • Joint Support Office
  • Par 2.9.1 The Committee need a briefing from
    the Department with regard to Information and
    Communication Technology (ICT) obsolescence to
    which extend this is a challenge to replace this
    equipment
  • Information and Communication Technology (ICT)
    obsolescence
  • Oct 06 DOD promulgated Information Strategy
    (embracing mainly information superiority and
    security), a DOD Enterprise Information Systems
    (DEIS) framework
  • DEIS Master Plan to be approved in March 2007,
    thereafter projects will focus on procuring
    effective, optimised, integrated, secured
    solutions
  • On obtaining funding for implementation of DEIS
    Master Plan the challenge to replace
    obsolescent equipment will be addressed
  • DOD Logistic Agency
  • Par 2.9.1 The Committee also need an update on
    the Wahlmanstahl land claims
  • Update on Wahlmanstahl land claims
  • DOD and the claimants agreed on the area to be
    restored
  • Agreement by the DOD was communicated to the
    land claims commission (Gauteng and NW
    Province)
  • Land Claims Commission now in the process to
    finalise administration process in order to
    transfer the land to the claimants

25
Joint Support (continued)
  • DOD Logistic Agency (continued)
  • Par 2.9.2 The Committee required feedback
    within 3 months with regard to the Asset
    Management system which is not fully compliant
    with General Recognised Accounting Practice
    (GRAP)
  • Accrual Accounting
  • Senior Asset Management team established and
    policy being finalised
  • Discussions with National Treasury (NT) IFMS
    programme to ensure that DOD and NT technical
    and software requirements are the same
  • DOD to apply to NT (clearing house) for any
    further enhancements to present systems
  • Will only be able to account according to GRAP
    with combined implementation of IFMS and
    enhanced DOD systems
  • Implementation scheduled from 2008 to 2012
  • Par 2.9.2 The Committee recommends an oversight
    visit to investigate the following two issues
  • DOD Air Supply Unit Deteriorating Facilities
    and Lack of Equipment
  • Vacant facilities identified in Thaba Tshwane
    to relocate DOD Air Supply Unit
  • Cost analyses has been done by NDPW for repair
    of the vacant facilities  
  • Approximately RM5 is required
  • On securing funding DFSM/Army Office, NDPW can
    start repair, followed by relocation of unit
  • Date for oversight visit to be determined

26
Joint Support (continued)
  • DOD Logistic Agency (continued)
  • DOD Restructuring Process Materiel/Logistics
  • Out of several alternatives developed, the
    following was approved
  • Chief of Acquisition is to transform into Chief
    of Matériel responsible for
  • Departmental governance, risk and compliance
    management authority for matériel
  • Capacitating Secretary for Defence's statutory
    functions
  • Continuing to manage acquisition
  • Chief of Logistics is to transform into Chief
    of Staff Logistics
  • Departmental functional authority for logistics
    (including delegated procurement)
  • Capacitating C SANDFs statutory functions
  • Progress in finalising implementation
    arrangements for Option 2A has been slow
  • A Request For Information (RFI) to test the
    market developed
  • Objective - to seek information from potential
    service providers able to assist DOD in
    development, implementation and validation of
    integrated and synergistic Asset and Supply
    Chain Management continuous improvement programme
  • RFI will be issued as soon as possible

27
Joint Support (continued)
  • Human Resources Support Centre
  • Par 2.9.3 The Committee needs to know who
    qualifies for the Non-Statutory Force Pension.
    How many outstanding applications are there and
    what are the criteria for applying. It is stated
    that 11 558 applications were forwarded to the
    GEPF and that 500 names were verified for the
    administration of the Military Veterans. The
    Committee will liaise with the Department in this
    regard. The committee further recommends that
    these options should be advertised and that more
    imbizos should be held so that more beneficiaries
    are reached.
  • Non Statutory Force (NSF) Pensions Dispensation
    (Report and presentation available)
  • Who qualifies. Former MK/APLA member who
    entered into employment agreement with DOD or
    any State department either as a Public Service
    Act Personnel (PSAP) member or as a Defence
    Act (uniform) personnel member through
    integration or normal personnel acquisition
    process
  • Criteria for Applying
  • Non-statutory Force service
  • The period between the date on which the NSF
    members joined their respective former forces
    and the date of their taking up employment with
    DOD
  • If joined former NSF before age 16, the service
    will start from age 16

28
Joint Support (continued)
  • NSF Pensions Dispensation (Continued)
  • Outstanding Applications
  • Numbers Integrated
  • Exited Members

Serving Members 12 091
Exited Members 9 280
TOTAL 21 371

Exit Type Qualifying members Payments by GEPF Outstanding Payments
Retired 742 230 512
Deceased 2 763 380 2383
Package 409 82 327
Resign / Discharge 5 366 810 4 556
Total 9 280 1 502 7 778
29
Joint Support (continued)
  • NSF Pensions Dispensation (Continued)
  • Outstanding Applications
  • Challenges
  • Members without valid addresses
  • Living members 569
  • Deceased members 318
  • Liaison took place with home affairs very
    little results
  • Letters sent to units - 62 members responded
  • NSF joining dates disputes 2 640, resolved
    601
  • Project not funded for FY2007/08 and indicated
    as a financial risk
  • MOD requested for political intervention
  • PCD Recommendations
  • Placing of Adverts. No funds were available
    in FY06/07 to place adverts
  • Holding Imbizos. Road shows conducted from
    November 06 Feb 07 distributing NSF
    pension quotations for serving members.
    Conducted 3 briefings on NSF pension benefits
    and solicit assistance in tracing
    outstanding beneficiaries. Traced 62
    beneficiaries with assistance of Military
    Veterans Associations. Imbizos with Military
    Veterans Associations planned for FY07/08
  • Meeting with MKVA. Meeting on 11 Oct 06 with
    representatives from MKVA requesting
    assistance in tracing beneficiaries. (List
    provided) To date no feedback received.

30
Acquisition Plan
  • Par 2.10 The Committee needs a briefing on the
    acquisition plan of the Department on the
    successful identification of the preferred bidder
    and approvals as well as initiation of
    negotiations with regards to the supplier of the
    Tactical Intelligence Systems
  • A multi-source tender process is utilised for the
    selection of the bidder.
  • AASB approval obtained in February 2007 wherein
    the preferred bidder is Denel Optronics as a
    main contractor and Aerosud as the mechanical
    subcontractor.
  • Integration of sensors into Cessna caravan will
    occur in the second quarter of 2007.
  • Development of data link by the end of 2007.
  • Delivery of 3 additional sensors early 2008.

31
Report of the Auditor General
  • Qualification Corrective Measures
  • Par 3.4. There should be an improvement on
  • Housing Loans and Guarantees ( Redemption of
    State Guarantees and Management of Credits on the
    Guarantee Account (130401)
  • Processes to redeem guarantees issued before 1
    January 2001
  • Obtain PERSOL reports and audit all files
  • Letters to financial institutions with follow
    ups
  • Rectify PERSOL data
  • Note registers and compile statistics
  • Letter to member at unit
  • Submissions to Directorate Financial Support
    Service (DFSS)
  • Audit files with credit on account Ledger
    13401
  • Letters to financial institutions with follow
    ups
  • Prepare submissions
  • Payment by Directorate Personnel Payments final
    pay section or DFSS
  • Progress made
  • Redeeming of guarantees total of 2406 cases
    with 6 sections already audited
  • Reduced credits on Ledger 130401 total of 681
    cases outstanding. RM5 055 795 credit
    reduced to RM2 699 264 by 2 February 2007
  • Work through all files by 15 June 07

32
Report of the Auditor General (continued)
  • Rank Review Audit
  • June 2004 AG reported shortcomings of 384 NSF
    members
  • Phased action plan implemented
  • Phase 1 - Determine correct name list of all
    members - completed
  • Phase 2 - Centralise rank review files and
    ensure all documentation are filed - to be
    completed by 30 April 2007
  • Phase 3 - Avail all files with updated name
    list to AG
  • Phase 4 - Determine whether all approved
    reviews have been implemented
  • Phase 5 - Integrate rank review files with
    members master files
  • During Phase 1 and 2 it was found that
  • Final list comprised of 383 names and not 384
    as referred to
  • Of 383 some 338 members benefited from the rank
    review and were re-ranked
  • Total of 28 members services terminated prior
    to 1 April 2003. They did not benefit
  • Total of 11 members promoted to higher ranks
    prior to and some subsequent to 1 April 2003
  • Total of 15 members initially recommended for
    certain appointments/promotions were changed
    at very late stage eg recommended for officer
    appointment refused promoted to WO1 rank
  • Re ranking promotions and appointments done wef
    1 April 2003. Members services terminated
    prior to 1 April 2003 and/or promoted
    prior/subsequent to 1 Apr 2003 no longer form
    part of audit
  • Challenge
  • Biggest challenge at present is to rebuild a
    set of files that can be audited
  • Task to be completed by end of April 2007

33
Report of the Auditor General (continued)
  • Capturing of Leave (Management of Leave
    Administration)
  • Deficiencies
  • Leave applications not captured electrically
  • Attendance registers not completed or
    reconciled with leave records
  • Supporting documents not attached to sick leave
    applications
  • Leave registers not utilised as prescribed
  • Leave application forms not filed on leave
    files
  • Corrective Measures
  • In-post training to leave clerks on unit level
    Mar to August 2006
  • Leave manuals, electronic input documents and
    training slide show placed on DOD Intranet for
    easy access to all levels
  • Instruction dated 26 September 2006
    disseminated to Services and Divisions to take
    corrective actions and institute corrective
    measures
  • Disseminated DOD Instruction on Management of
    Work Attendance (Co-signed by Secretary for
    Defence and C SANDF) to Services and Divisions in
    January 2007
  • Further Actions Planned
  • Continued lectures to learners on Joint Senior
    Command and Staff Programme
  • Continued presentations to units on work
    attendance and leave administration
  • Staff visits to inspect units with negative
    audit reports

34
Report of the Auditor General (continued)
  • Qualification Corrective Measures
  • Par 3.4. The Committee needs a briefing in
    correlation to the 60 month time frame needed for
    the Personnel expenditure. Unrealistic
    establishment referred to on page 60 in the
    Annual Report presentation. The PCD does not
    accept such a long time frame as a remedial
    measure
  • Unrealistic Post Establishment
  • The time frame of 60 months as indicated in the
    Annual Report presentation to address the
    unrealistic establishment is not correct
  • Remedial actions have been instituted in order
    to address the issue as a matter of great
    urgency
  • This matter emanates from the Auditor General
    Report on the FY 2005/2006 Annual Report (See
    Reference Statement)
  • Reference Statement
  • The Auditor General Report on the FY2005/2006
    Annual Report states that there has been an
    increase in the number of approved posts from
    95,088 in 2005 to 102 048 in the reporting year,
    of which 77,858 posts were filled. Based on these
    approved posts, the achievement of the 2010 goal
    of 70,000 approved posts does not appear to be
    realistic. (FY04/05 05/06 Audit Findings)

35
Report of the Auditor General (continued)
  • Current DOD Challenges
  • Reduce SMCS posts to Defence Review Update 2006
    figures
  • SMCS total 103,552
  • DR Update 85,375
  • Administrative student posts 9,925
  • Reduce SMCS by 8,252
  • New SMS Total
  • DR 2006 total 85,375
  • Administrative student posts 9,925
  • Total 95,300
  • Funding available 78,648
  • Funding shortfall 6,727

36
Report of the Auditor General (continued)
  • Remedial Action
  • Delete all duplicate structures (staffing
    purposes) /- 200 30 March 2007
  • Delete posts on closing down units 2000 (All
    Services Divisions) 31 May 2007,
    continuous thereafter
  • Delete Transformation and Restructuring
    Programme (TRP) posts not required /- 2000
    (SA Army) 30 March 2007
  • Delete posts not filled for last 5 years,
    excluding designated scarce skills musterings
    30 March 2007
  • Issue DOD Plan Instruction by 31 March 07 to
    reduce 8,252 redundant posts on the SMCS as
    follows
  • Apply DR06 post establishment baseline targets
    for each Service and Division as per parameters
    of the Force Design Model 15 March 07
  • Analyse rank /salary ratios and rank/age
    targets within each Service /Division with
    the aim to curb rank inflation 15 Aug 07
  • Ongoing review of organisational design of
    Services and Divisions to verify the most
    relevant and affordable structures
  • Ongoing execution of the management of DAP and
    PSAP on the SMCS ito CHR Instruction No
    06/2006 dated 30 June 2006 -Services/Divisions at
    monthly HR Board
  • Actively identify posts not being utilised -
    DIMS through monthly Structure Control Board
    (SCB).

37
Report of the Auditor General
  • There should be an improvement on the following
    issues
  • Qualification Corrective Measures Travel and
    Subsistence
  • Travel and Subsistence Action Plan
  • Reasons
  • No interface between the FMS and PERSOL
    system reliant on a manually driven process.
  • Measures and Completion Dates
  • 5 members already appointed, 2 more to be
    appointed before June 2007.
  • System Interface between FMS and PERSOL to be
    completed in 2007/2008.
  • The CMIS Division is currently in the process
    of amending the expenditure control
  • systems which will commence with the
    Personnel Payments system.
  • Financial year balances on main ledger account
    to be reconciled by 31 Mar 08.

38
Report of the Auditor-General
  • Departmental Revenue Action Plan
  • There should be an improvement on the following
    issues
  • Qualification Corrective Measures
    Departmental Revenue

39
Revenue Policy
Capturing on PERSOL Force number related
Revenue Budget
Revenue Collection
Capturing on CRV system
Tariffs tariff structure
Capturing on medical Debtors System
Accounting
NT Approval distribution
Dep into NRF
Reporting in Annual Financial Statements
40
REVENUE MANAGEMENT
  • FMS Enhancements
  • Technical Investigation completed by 25 Oct 06.
  • Documentation and cost estimate submitted.
  • Client Approval - Done.
  • CMIS Ratification - Done.
  • Programming completed 23 Feb 07 (Done).
  • Testing 26 Feb 07 to 9 Mar 07 (In process).
  • Implementation during Apr 07 (On schedule).

41
REVENUE ACTION PLAN
  • Formalise responsibilities 30 Nov 06 DODW
    impact.
  • Amend FMS to enable capturing of revenue budget
    31 Dec 06 Completed.
  • Enhanced Cash Receipt Voucher Systems 31 Mar 07
    In process.
  • Improved budget rules 31 Jan 07 Done
    (Continuous).
  • Staffing of vacant AD Revenue Budget post 31
    Jan 07 In process.
  • Approved DOD Tariff Structure and Tariffs for
    07/08 31 Jan 07.
  • Distribution of approve tariffs 15 Feb 07.
  • Amended PERSOL System to allocate salary
    deductions to specific series 31 Mar 07 In
    process.

42
REVENUE ACTION PLAN (CONT)
  • Update mainframe systems with new tariffs 31
    Mar 07.
  • Item 90 SCOA compliant 100.
  • Approved Tariff Management DODI 30 Apr 07.
  • Approved Revenue Management DODI and JDP 30 Apr
    07.
  • Request revised tariff structure and tariffs for
    08/09 1 Sep 07.
  • Submit revised tariff structure and tariffs to NT
    for approval 7 Dec 07.
  • Distribute approved tariff structure and tariffs
    within DOD 15 Feb 07.
  • Call for inputs to revise and update existing
    Revenue and Tariff Management DODIs and JDPs 22
    Feb 08.
  • Ensure Item 90 remains SCOA compliant 31 Mar 08.
  • Update mainframe systems with approved tariffs
    31 Mar 08.

43
Report of the Auditor-General
  • Approved Deviation Software and other
    intangible assets movement schedule Action Plan
  • Armscor has developed a draft IP Management
    Practice Note to implement DOD IP Management
    Policy.
  • This team is also responsible for the
    establishment of an electronic IP Database.
  • Armscor is responsible for the maintenance of
    the database whilst an oversight function within
    the DOD will monitor the accuracy and
    completeness of the database.
  • The envisaged target date for implementation of a
    manual IP database is 1 April 2007 whilst the
    envisaged target date for implementation of an
    electronic IP database is 1 April 2008.

44
Report to the Auditor -General
  • Par 3.4. The Committee needs a briefing in
    correlation with regard to the 60 month time
    frame needed for the Information systems audit
    referred to on page 60 in the Annual Report
    presentation.
  •   The presentation made on the 12 September 2006
    Audit referred to the IFMS implementation
    timeframes. These timeframes are from the
    National Treasurys IFMS implementation plan. The
    IFMS implementation is a multidsciplinary
    project chaired by the National Treasury where
    all departments are represented.

45
Emphasis of Matter Items 05/06
Par 3.5 The Committee agrees that improvement is needed for physical Asset
Action Plan For Physical Asset Movement
With full cognisance of the NT moratorium on Information Systems with a financial implication the following can be presented A bridging tool between SCOA NATO categories was developed in consultation with National Treasury. Found to be successful for budgeting for groups of items but not for the detail required when reporting. The DOD and National Treasury are drawing up an Asset Management Plan which will address this anomaly within the next three years. The DOD will approach the IFMS Clearinghouse of the GITO council, to carry out this enhancement to solve this matter for the 2007/2008 financial year. The Assets Register accounted for most assets in terms of asset description and quantities and not monetary value. (Total Asset Value in Monetary Value is impossible at this stage). Reporting requirement in terms of SCOA are different from the DOD codification and accounting categories based on NATO prescripts.
46
Emphasis of Matter Items 05/06
Par 3.5 The Committee agrees that improvement is needed for Software and other intangible assets
Action Plan for management of software and other tangibles
Armscor has developed a draft IP Management Practice Note to implement DOD IP Management Policy. This team is also responsible for the establishment of an electronic IP Database. Armscor is responsible for the maintenance of the database whilst an oversight function within the DOD will monitor the accuracy and completeness of the database. The envisaged target date for implementation of a manual IP database is 1 April 2007 whilst the envisaged target date for implementation of an electronic IP database is 1 April 2008.
47
Conclusion
  • QUESTIONS AND DISCUSSION

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