1. AN OVERVIEW OF OUTCOMES, PRIORITIES AND KEY ISSUES FOR OVERSIGHT AND MONITORING FOR DODMV AND ITS ENTITIES
15 October 2014
Peter Daniels

2. Scope Government outcomes Ministerial priorities Strategic Focus Areas
DEPARTMENT OF DEFENCE
Government outcomes
Ministerial priorities
Strategic Focus Areas
DOD Budget in context and DOD Spending patterns
Future Spending
Key issues for Oversight and Monitoring
DEPARTMENT OF MILITARY VETERANS
National Development Plan and Government Outcomes
Ministerial priorities and DMV Policies
DMV Budget
CASTLE CONTROL BOARD
ARMSCOR

3. DOD: GOVERNMENT OUTCOMES
The Medium Term Strategic Framework identifies 12 desired outcomes of the Government where the DODMV is a co-signatory to Outcome 11: Creating a better South Africa and contributing to a better and safer Africa in a better world. Other outcomes to which the DODMV indirectly contributes include:
Outcome 2: A long and healthy life for all South Africans.
Outcome 3: All people in South Africa are and feel safe.
Outcome 5: A skilled and capable workforce to support an inclusive growth path.
Outcome 12: An efficient, effective and development-oriented public service and an empowered, fair and inclusive citizenship.

4. DOD: COMPARISON 2012/13 AND 2013/14 Number of targets
MTSF Output
2012/13
2013/14
Number of targets
Actual Achievement
Outcome 2 3
3 Achieved
Outcome 3 4
1 Achieved 3 Information classified 6
1 achieved, 2 underachieved 3 classified information
Outcome 5
2 underachieved 1 achieved
3 achieved
Outcome 11 11
8 achieved, 3 underachieved 3 information classified
5 achieved, 3 underachieved 3 information classified
Outcome 12 1
1 Achieved
Not mentioned

5. MINISTERIAL PRIORITIES
PRIORITY
2010/11
2011/12
2012/13
2013/14
2014/15
Enhancement of the SANDF’s Landward Defence Capabilities (rejuvenation and upgrading 2010/11) √
Maritime Security.
Job Creation (Force rejuvenation 2013/14).
Enhancement of the SANDF’s Peacekeeping Capability.
National Youth Service (NYS).
Revitalisation of the Reserves.
Restructuring and Support of the Defence Industry.
Defence Works Capability.

6. STRATEGIC FOCUS AREAS Strategic Focus Area 2013/14 2014/15 Comment
Defence Review √
Awaiting finalisation by the JSCD
Military Skills Development System
A reduced target of 4 208 (8 955 in 2012/13) was set for 2013/14 and the actual achievement was 7 005
Transformation within the SANDF
Representation of men and women in command structures remains a challenge
DOD Grievance Procedure
This area needs attention as 139 grievances were resolved in 2013/14 while 644 remain unresolved.
Reconfiguration of Force number allocation
To ensure integration and cohesion, the DOD is investigating an IT system to reconfigure force numbers.
Maintenance and enforcement of Discipline
There should be zero tolerance on ill-discipline and DOD legal system should be strengthened.
DOD Planning instrument
Department planning to be aligned to government outcomes, budgeting, and Monitoring and Evaluation.
Corruption and Fraud
Continues with a zero tolerance attitude to all forms.
DOD Audit
In pursuit of clean audit with assistance of Operation Clean audit and Internal Audit Division.

7. ADDITIONAL STRATEGIC FOCUS AREAS
Comment
Defence Diplomacy
Except for changes in the number of military attachés, the role of the DOD on the continent is crucial.
Building a Reliable Information Technology Capacity.
This is a continuous issue that needs attention.
DOD Supply Chain Management (SCM)
SCM procedures and management practices requires attention.
National Cost Containment Measures
The proposals by National Treasury should be adhered to.
Disaster Relief and Humanitarian Assistance
The capabilities of the DOD allows for this and but it should not detract from its primary functions such as PSO’s and Border safeguarding.
Border Safeguarding
An important area that needs to be monitored and a follow-up Oversight visit to these areas should be undertaken.
DOD Research and Development Capacity
The Defence Review led to a standstill on this issue and progress should in future be reported on this.
Human Resources
The recommendations of National Treasury and especially the Defence Review should be considered.
Prime Mission Equipment (PME)
As indicated earlier, an urgent need for especially the Landward Defence Capability.
Gender Mainstreaming
As part of Transformation, this issue should be paid the necessary attention.
Youth Development Programmes
In conjunction with the MSDS and NYS as well as the Defence Industry’s contribution, this national priority needs to be prioritised
Human Resources (HR) Expenditure
The unhealthy ratio between Human Resources, Operational and capital expenditure needs to be addressed.
Ethics and Integrity
Good Discipline & fight against Fraud & Corruption built on ethical and integrity platform.

8. DOD BUDGET IN CONTEXT Department Police Defence Correctional Services
2013/14
2014/15
2015/16
2016/7
Personnel as at 31 March 2014
Percentage of 2014/15 Budget
Police
68 791
72 507
76 541
81 682
48%
Defence
40 658
42 831
45 301
48 180
78 707
28%
Correctional Services
18 748
19 721
20 795
22 080
41 825
13%
Justice & Constitutional Development
13 856
15 161
15 914
17 163
69 352
10%
Independent Police Investigative Directorate
217
234
247
262
308
+-1%
Total
100

9. DEFENCE BUDGET ALLOCATIONS 2010/11 – 2014/15
Programme
2010/11
2011/12
2012/13
2013/14
2014/15
Change 2010/11 – 2014/15
% change 2010/11 – 2014/15
Ranking
% of budget
Audited
Revised
Allocated
Programme 1: Administration
3 452.9
3 747.1
3 781.6
4 509.0
40.9% 4
11.4
Programme 2: Force Employment
2 265.5
2 358.5
2 781.0
3 555.7
3 437.0
51.7% 7
8.0
Programme 3: Landward Defence
9 295.6
10 962.2
12 367.9
13 604.9
49% 1
32.3
Programme 4: Air Defence
5 489.1
6 527.7
7 074.9
5 714.4
7 166.9
30.5% 2
16.7
Programme 5: Maritime Defence
2 349.9
2 574.7
2 894.9
3 107.3
3 678.5
56% 6
8.5
Programme 6: Military Health Support
3 150.1
3 400.1
3 459.9
3 762.1
3 849.1
699
22% 5
8.9
Programme 7: Defence Intelligence
633.9
653.1
705.1
767.9
792.1
158.2
24.9% 8
1.8
Programme 8:General Support
3 805.4
4 107.9
4 636.9
5 636.8
5 186.3
36.2% 3 12
TOTAL
30 442.4
34 331.4
37 702.2
40 658.2
42 831.2

10. FUTURE SPENDING: 2014 Defence Review
Alerts us to the “critical state of decline” and view that Defence Force is underfunded,
Incumbent this be addressed as it impacts on the State of Readiness.
Focus over next five years on “Arrest the decline in critical capabilities through immediate directed interventions.”
Minister (Budget Vote): priority the “Creation of a full time capacity to develop a methodology for implementation of the Defence Review once finalised by Parliament.”
This will be used to guide strategic areas over the next five years, as part of the first milestone

11. Proposed Planning Milestones
Five planning milestones to restore the defence capability [9-14]
Planning Milestone 1: Arrest the decline in critical capabilities through immediate, directed interventions.
Planning Milestone 2: Rebalance and re-organise the Defence Force as the foundation for future growth.
Milestone 1 & 2 can be executed concurrently should resources be available
Planning Milestone 3: Create the sustainable Defence Force that can meet current ordered defence commitments.
Planning Milestone 4: Enhance the Defence Force’s capacity to respond to nascent challenges in the strategic environment.
Planning Milestone 5: Defend the Republic against insurgency and/or armed conflict to the level of limited war. It is important to note that Milestone 5 above reflects the Constitutional mandate to its fullest possible extent

12. FUTURE SPENDING: 2014 Defence Review…
Strategic areas over next five years as part of the first milestone:
a. Ensuring Strategic Leadership and Succession Planning for the Defence Programme over the next 20 years.
b. Developing the Funding Mechanism and ensure adequate resourcing of the Defence function.
c. Directing the renewal of defence personnel to ensure that the personnel profile is able to meet future defence obligations.
d. Directing the renewal of the defence organisation to achieve greater efficiencies and effectiveness.
e. Reviewing the defence capability strategy and direct defence acquisition in line with the four milestones of the Defence Review.
f. Directing the development of the Defence Industry Strategy and the Technology Agenda and Innovation Plans

13. KEY ISSUES FOR OVERSIGHT AND MONITORING
Finalisation and implementation of the 2014 Defence Review
Border safeguarding: ensuring sufficient number of sub-units
Job creation and specific contribution of Defence Industry, MSDS and NYS to this priority
Enhancement of Landward Defence Capabilities especially as it relates to PME (Project Hoefyster 238 Infantry Combat vehicles)
Addressing adverse audit qualifications and enhancement of the Internal Audit Function
Monitor unauthorised, fruitless and wasteful and irregular expenditure
Progress with Defence Works Formation
Compensation of employees
Additional funding for SAAF’s operational capability
The limited sea hours for the SA Navy

14. KEY ISSUES FOR OVERSIGHT AND MONITORING…
Progress with replacement of Offshore Patrol Vessels for the SA Navy (Project Biro)
Funds to improve the operations of the SAMHS (MTT on SAMHS)
Transformation in the SANDF and in particular the SAAF and the SA Navy
Evaluation of the utilisation of the Special Defence Accounts funds
Low spending on and a decreased allocation to Force Employment Programme and how this affects foreign deployment
Costs of training and deployment of SANDF for proposed African Capacity for Immediate Response to Crises (ACIRC) initiative.
Management Performance Assessment Plan (MPAT) by the Department of Planning, Monitoring and Evaluation.
Supply Change management
National Cost Containment measures
Fraud and Corruption

15. DEPARTMENT OF MILITARY VETERANS
National Development Plan (NDP): DMV will contribute in 2014 to:
Chapter 3: Economy and employment - empowerment programme
Chapter 6: An integrated and inclusive rural economy – socio-economic support services will contribute
Chapter 8: Transforming human settlements - decent housing
Chapter 9: Improving education, training and innovation: improvement of education &d training levels of military veterans
Chapter 10: Health care for all - issue health cards
Chapter 11: Social Protection: maximise efforts to ensure that the maximum eligible military veterans covered under this.
Chapter 13: Building a capable state –various activities assist the government to achieve the capable state
Chapter 14: Promoting accountability and fighting corruption - Fighting corruption and fraud features
Chapter 15: Transformative society and uniting the country – righting the wrongs of the past through provision of socio-economic and empowerment support.

16. Medium Term Strategic Framework: MTSF period 2009 – 2014
Outcome 1: Quality basic education Outcome 2: A long and healthy life for all South Africans Outcome 4: Decent employment through inclusive growth Outcome 5: A skilled and capable workforce to support an inclusive growth path Outcome 7: Vibrant, equitable, sustainable rural communities contributing towards food security for all Outcome 8: Sustainable human settlements and improved quality of household life Outcome 9: Responsive, accountable, effective and efficient local government Outcome 12: An efficient, effective and development-oriented public service MTSF period 2014 – 2019 added two new outcomes Outcome 13: A comprehensive, responsive and sustainable social protection system Outcome 14: A diverse, socially cohesive society with a common national identity

17. MINISTERIAL PRIORITIES
MINISTERIAL PRIORITY
SP 2012/16
APP 2013
APP 2014
Provision of immediate social services to relief distress among the most vulnerable Military Veterans √
Provision of comprehensive support services to military veterans and, where applicable, to their dependents, subject to availability of resources.
The promotion of the heritage of military veterans and memorialising and honouring military veterans.
Maintenance of a credible and secure national military veterans’ database.
Promotion of empowerment programmes for military veterans
Defining features of the legislative sustained agenda
N/M
Accelerate the delivery of benefits as espoused by Section 5 of the Act
Empowerment of military veterans to enhance their contribution to reconciliation and nation building
Promotion of military veterans’ heritage
Developing, confirming and deepening the skills base of military veterans
Implementation of a high impact communication and marketing strategy
Strengthening governance and oversight protocols to give effect to the provisions of the Act
Ensure a fully functional DMV with an independent Budget Vote and systems

18. DMV Policies
Over the MTEF period it will focus on the finalisation of the following service delivery policies:
Public Transport Support for Military Veterans.
Military Veterans Social Relief of Distress.
Military Veterans pension.
Military Veterans heritage.
Stakeholder Management.

19. DMV Budget Programme (R million) 2011/ 12 2012/13 2013/ 14
% of total budget
2014/15
2015/ 16
Programme 1: Administration
19 989
96 976
152.8
43.48%
178.2
35.34%
169.2
27.88%
Programme 2: Socio Economic Support Services
n/m
122.2
34.78%
168.1
33.34%
267.5
44.08%
Programme 3: Empowerment and Stakeholder Management
76.5
21.77%
157.9
31.32%
170.2
28.05%
TOTAL
351.4
504.2
606.8

20. Changes in DMV Budget Programme (R million) 2011/12 2012/13 2013/14
Programme
(R million)
2011/12
2012/13
2013/14
2014/15
Ranking
Change between 2013/14 and 2014/15
% change between 2013/14 and 2014/15
Programme 1: Administration
19 989
96 976
152.8
178.2 1
25.4
16.7%
Programme 2: Socio Economic Support Services
n/m
122.2
168.1 2
45.93
37.56%
Programme 3: Empowerment and Stakeholder Management
76.5
157.9 3
81.4
106.4%
TOTAL
351.4
504.2
152.73

21. KEY ISSUES FOR OVERSIGHT AND MONITORING
Outcomes of the Strategic Plan session to enhance the turnaround plan and service delivery and how to spend the money allocated.
Memoranda of Understanding (MOU’s) and Service Level Agreements (SLA’S) between the DMV and other service delivery agencies.
Staffing of vacant funded posts with “committed, qualified and competent personnel.”
The filling of especially critical posts.
Monitoring the military veterans’ database.
Slow progress in the installation of IT systems.
The contradicting personnel information.
Success of applying the various mean tests to roll out of benefits to deserving military veterans.
Accommodation for recruited staff and provincial structures.

22. KEY ISSUES FOR OVERSIGHT AND MONITORING
Methodology to decide on the beneficiaries of in particular employment opportunities.
How the allocation of bursaries to dependants are determined.
Whether the bursaries allocated by NASFAS were funded by the DMV or whether this were part of the annual allocation by NASFAS.
Spending on items such as Consultants, Sustenance and Traveling, Entertainment and catering, and Stationary and printing.
Progress to establish a reliable and functional communication and marketing strategy to communicate and market the DMV.
Establishment of Wellness Centres, how many and where these were established.
Access of Burial support for military veterans should not be over- complicated to ensure dignified burials for deserving military veterans.
Progress with establishing an independent vote, systems and processes for the Department

23. CASTLE CONTROL BOARD: KEY ISSUES FOR OVERSIGHT
The impact of restorations at the Castle of Good Hope (CGH) on its daily Operations.
Plans to utilise the R13.9 million surplus over the MTEF period.
Monitoring of plans to increase the revenue from tourism through aggressive marketing and increasing the number of visitors.
Timeframes attached to the filling of vacancies at the CGH.
Monitoring of expenditure related to Sustenance and Travel, Entertainment, Printing and publication.
Economic viability where the increase in staff costs should be monitored as it showed increases which will impact on the R13.9 million surplus accrued over the last decade.
Vagrancy and crime at the Castle and its response to deal with it.
The status of Het Bakhuys Restaurant and the utilisation of revenue generated by it.

24. CASTLE CONTROL BOARD: KEY ISSUES FOR OVERSIGHT
Findings of the Auditor-General:
Predetermined objectives where targets were not specific and well-defined
Compliance with legislation in relation to:
Internal Audit
Procurement and Contract Management
Expenditure Management
Strategic Plan
Internal Control:
Leadership
Financial and Performance Management
Governance.

25. ARMSCOR : KEY ISSUES FOR OVERSIGHT
Finalisation of the appointment of a permanent CEO.
Armscor’s role in the implementation of the 2014 Defence Review,
Monitoring of Armscor’s Regional Strategy.
Monitoring of the Talent Development Programme,
The filling of vacancies : Employment Equity - Black females.
Monitoring and reporting by Armscor on 16 Defence Industrial participation agreements
Monitor costs for international training, the number of people using this opportunity and success rate on courses and retention afterwards.

26. ARMSCOR : KEY ISSUES FOR OVERSIGHT
Simons Town Dockyard:
Issues around the funding model,
Findings of the 2012/13 in-depth study to turn it around and progress in this regard,
Measures to address the Human Resource challenges,
Impact of delays/incapacity on SA Navy’s operational ability such as in Operation COPPER, and
Challenges with repairing frigates and submarines.
Report of the Auditor-General:
Expenditure Management – lack of effective steps to prevent irregular expenditure.
Annual Financial Statement – not fully prepared in accordance with prescribed framework.
Leadership – Oversight responsibility regarding compliance and internal controls inadequate.

27. Thank you Peter Daniels pdaniels@parliament.gov.za 021 403 8450