1. PRESENTATION TO THE PORTFOLIO COMMITTEE ON DEFENCE AND MILITARY VETERANS (PCD&MV) ANNUAL REPORT 2015/16FY DEPARTMENT OF MILITARY VETERANS
Date: 18 October 2016
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2. PRESENTATION OUTLINE Aim of the presentation
Financial Information: Appropriation Statement
AGSA Audit Findings for the period ending 31 March 2016
Mitigation strategies to resolve Audit
Summary of Performance as Per the APP 2015/16FY
Performance against The Executive Authority’s (EAs) Priorities
Turnaround Strategic Intervention (TSI)
Human Resource Management
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3. AIM OF THE PRESENTATION
To provide an outlook of the performance, challenges and mitigation strategies of the Department of Military Veterans with regards to the Annual Report (AR) for the period ending 31 March 2016.
"A dignified, unified, empowered and self-sufficient military veterans’ community”

4. FINANCIAL INFORMATION: APPROPRIATION
STATEMENT
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5. Appropriation Statement
Administration:
Underspend mainly driven by unpaid invoices for Office Rental, Computer Services, Research Projects
Socio-Economic Support:
DMV is 100% dependant on DHS for Housing Support
Recipients for Education Support increased substantially in both Public and Public Institutions leading to non payment of some invoices
Empowerment & Stakeholder Management
Less than expected delivery on skills projects
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6. Appropriation Statement
Cost Of Employment:
Despite the vacancy rate of 21%, 78 contractors were used to fulfil service delivery and hence an overspend in COE
Goods & Services/Transfers & Subsidies:
R160m planned for housing unspent as DMV is 100% reliant on DHS.
Not all Education invoices were received on time leading to underspend vs budget
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7. Challenges on Service Delivery
Programme 1:
Mainly affected by non-payment of Computer Services invoice – SITA due to lack of invoice tracking system
Research activities not fully executed
Programme 2:
Housing – DMV is 100% dependant on DHS to deliver against this benefit. DHS Eastern Cape and DHS Orange Free State delivered. Other Provinces are struggling to deliver
Health and Wellness Support – Although the services were being delivered, invoices were not systematically being submitted to DMV for payment.
Education Support –
Capacity constraints due to the increased number of beneficiaries
Invoices not submitted on time by institutions to DMV for payment
Private Institutions are not always Tax Compliant and hence lack of payment for students at these institutions
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8. Challenges on Service Delivery..continued
Programme 2:
Military Veterans Pension – not yet rolled out as the accuracy of the database is under review.
Also the selection criteria was not well informed at the time
Social Relief of Distress – The partnership with SASSA did not materialise as SASSA referred DMV to its service provider, Cash Payment Services (CPS). DMV has since made an arrangement with ABSA to distribute this benefit.
Access to Transport – MoU not yet approved
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9. Challenges on Service Delivery..continued
Programme 3: Skills Development
Service Provider reluctance to provide Tax Clearance Certificates or not having proper tax details. To avert this now, new service providers are encouraged to register on the Central Suppliers Database
Service Provider banking details needing to be verified on National Treasury Safety Net
Incomplete application forms submitted by applicants, making it difficult to follow up to provide service
Applicants not registered on military veterans database creates uncertainty about bona fide status
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10. Challenges on Service Delivery..continued
Programme 3: Business Empowerment
Staffing capacity constraints
Non approval of annual service programme
Dependency on SEDA Programme facilitators
Absence of Business Empowerment Policy
Programme 3: Heritage, Memorialisation, Burial Support and Honouring
APLA MVA forefathers not honoured owing to factional challenges within APLA MVA. Medal design has been prepared and has been discussed but cannot be minted
Heritage sites not established owing to insufficient collaborative discussion between departments responsible for Heritage In South Africa
Delays in payments for funerals caused by service providers not having correct registration documents
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11. Spend Mitigating Actions
Finalisation of Service Level Agreement (SLA) with ARMSCOR to:
Mitigate the risk of being 100% dependant on DHS for housing delivery by appointing ARMSCOR as an implementing agent to assist with:
Renovations of Military Veteran Houses
Building houses where Military Veterans own serviced stands
Use the services of ARMSCOR as when required to deliver on all other benefits, should DMV be encountering challenges
Assist Military Veterans with bonds under distress
Finalisation of SLA with Edu loan to facilitate the payment of Education Support invoices
Seek for the approval of the Concurrence Letter for Military Veterans Pension
Social Relief of Distress (SRD) rolled out effective May Budget to be monitored as this benefit continues to receive popularity
Implement the remaining Skills Development, Heritage and Memorialisation initiatives such as Computer Skills using SASSETA, Erect Tombstones, Sewing project with ARMCOR, amongst other things
Most of all, invoice tracking is essential to ensure timeous payment to suppliers/service providers
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12. AGSA AUDIT FINDINGS FOR PERIOD
ENDING 31 MARCH 2016
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13. AGSA Audit Findings
During the 2015/16FY the department obtained a qualified audit opinion as expressed by the Auditor–General of South Africa (AGSA) on the basis of one qualification being movable tangible capital assets an improvement from two qualifications as reported in the 2014/15FY.
"A dignified, unified, empowered and self-sufficient military veterans’ community”

14. AGSA Audit Findings
AGSA highlighted the following key aspects for considerations:
Qualification
Movable tangible capital assets
Predetermined objectives
Measurability: Targets not specific and measurable and indicators not well defined
Reliability: Mainly due to the limitations of scope
Non-compliance
Annual Financial Statements not prepared in accordance with MCS
Strategic planning and performance reporting
Expenditure management
Procurement and contract management
Internal Control
Leadership
Financial and performance management
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15. Repeat Audit Findings Auditable Area 2015/16FY 2014/15FY
AOPI (performance reporting) 
Tangible capital and Minor Assets
Opening balances (assets) x
Prepayments
Basis for AFS
Material underspending of the budget
Procurement & contracts (G&S)
Accruals
Expenditure Management: Irregular Expenditure, Fruitless, Wasteful and expenditure
Scope limitation
Human Resource Management (HR)
Misclassifications
Policy register
Internal Control Deficiency
Internal Audit
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16. Mitigation Strategies to Resolve Audit Outcome
Internal Control
Audit Outcome
Status - Mitigation Strategies
Capital and minor assets
Assets procured not traced to the asset register – limitation of assets
Asset Register was provided to AGSA and was audited. However, AGSA did not allow for adjustments to be done on AFS.
Efforts were made to ensure that the receipt of documents from DOD to support the opening balances R2,7M.
SCM – Procurement process and contract management
Inadequate procurement process (non-compliance, irregular expenditure)
LOGIS system not in use.
GS: Limitation of scope-filing system
Commitments & Accruals.
SCM policy (draft)
Procurement plan – not submitted
1) Implement LOGIS – However, data cleansing and system setup takes time. We can only Go Live on the 01 April 2017
2) Training of SCM officials
3) Procurement plan submission 2016/17FY
4) Implement change management in SCM
5) Accrual listing developed
6) Communicate SCM and Finance delegations.
7) Structure review – strengthen leadership
8) Bid committee established. Training has been arranged
Payments not settled within 30 days
Some of the processes have been reviewed to ensure timeous of payments to suppliers
However, the current reporting is affected by the delayed payments from the previous FY
Finance
Misclassifications
Underspending of funds
Modify and update policies and SOPs
Misclassifications are reassessed and journalized for corrections. Continuous spot checks are done.
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17. Mitigation strategies to resolve Audit Outcome
Internal Control
Audit Outcome
Status - Mitigation Strategies
AOPO
Targets were not specific and measurable and indicators were not well defined
Datasheets were developed to support technical indicator descriptions.
Expenditure Management: Irregular, Fruitless and wasteful expenditure
Effective steps were not taken to prevent fruitless and wasteful expenditure. Full disclosure not made in the AFS.
- Board of enquiry established to ensure proper investigation of cases for possible condonment and or write-offs.
- Decentralised delegations.
Prepayments
An amount expensed in the prior year has been disclosed as the pre-payment in the current year
AFS procedure manual has been modified to prevent this. This was a new disclosure note and NT was consulted prior to disclosure note completion.
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18. PERFORMANCE AGAINST SET TARGETS AS PER THE ANNUAL PERFORMANCE PLAN (APP) 2015/16FY
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19. OVERALL DEPARTMENTAL PERFORMANCE OVERVIEW
The Department committed itself to achieve 20 targeted performance indicators during the 2015/16FY.
Of the 20 targeted performance indicators, 11 targets were achieved which constituted to 55% of the overall achievement
Departmental Performance = No. of targets achieved x 100
Total no of targets set
= 11 x 100 20
= 55%
The department achieved 55% on the overall performance for the 2015/16FY.
Planned targets
Targets achieved
Targets not achieved
20 of 20 APP targets 11 09
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20. Programme 1: Administration Performance Overview
The Department committed itself to achieve 10 targeted performance indicators during the 2015/16FY.
Of the 10 targeted performance indicators, 6 targets were achieved which constituted to 60% of the overall achievement.
Departmental Performance = No. of targets achieved x 100
Total no of targets set
= 6 x 100 10
= 60%
The department achieved 60% on the overall performance for the 2015/16FY.
Planned targets
Targets achieved
Targets not achieved
10 of 10 APP targets 06 04
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21. Programme 2: SES Performance Overview
The Department committed itself to achieve 5 targeted performance indicators during the 2015/16FY.
Of the 5 targeted performance indicators, 3 targets were achieved which constituted to 60% of the overall achievement.
Departmental Performance = No. of targets achieved x 100
Total no of targets set
= 3 x 100 5
= 60%
The department achieved 60% on the overall performance for the 2015/16FY.
Planned targets
Targets achieved
Targets not achieved
05 of 05 APP targets 03 02
"A dignified, unified, empowered and self-sufficient military veterans’ community”

22. Programme 3: ESM Performance Overview
The Department committed itself to achieve 5 targeted performance indicators during the 2015/16FY.
Of the 5 targeted performance indicators, 2 target was achieved which constituted to 40% of the overall achievement.
Departmental Performance = No. of targets achieved x 100
Total no of targets set
= 2 x 100 5
= 40%
The department achieved 40% on the overall performance for the 2015/16FY.
Planned targets
Targets achieved
Targets not achieved
05 of 05 APP targets 02 03
"A dignified, unified, empowered and self-sufficient military veterans’ community”

23. PERFORMANCE AGAINST THE EXECUTIVE AUTHORITY’S (EA) PRIORITIES
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24. PERFORMANCE AGAINST THE EXECUTIVE AUTHORITY’S PRIORITIES (1)
DMV Contribution linked to Executive Authority’s Priorities
Progress as at 31 March 2016
Priority 1: Ensuring a fully functional Department of Military Veterans with an independent vote, systems and processes
As at 31st March 2016, the Department of Military Veterans filled a total of 133 permanent posts from the 169 funded posts.
Priority 2: Strengthening governance and oversight protocols to give effect to the provisions of the Act
The Act established the governance structures and institutions to provide advice to the Executive Authority on the delivery of justiciable and justifiable socio-economic services to Military Veterans.
The Military Veterans Advisory Council and the military Veterans Appeals Board Act were established, appointed and are operational
The Audit Committee is still a shared service with DOD
Turnaround Strategic Initiative (TSI) was established to enhance the capacity of the DMV to deliver on its mandate.
Priority 3: Provision of immediate social relief of
distress to the most vulnerable Military Veterans
As at 31 March 2016, a total of military veterans received SRD through SASSA
The Department also intervened in 10 cases of destitute military veterans and provided them with temporary shelter under the SRD programme.
Priority 4: To provide comprehensive support
services to Military Veterans and where applicable,
to their dependants
Access to health support
As of 31st March 2016, military veterans were authorised to access health care services adding to a total accumulative number of as from 2013/14 to date
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25. PERFORMANCE AGAINST THE EXECUTIVE AUTHORITY’S PRIORITIES (2)
DMV Contribution linked to Executive Authority’s Priorities
Progress as at 31 March 2016
Priority 4: To provide comprehensive support
services to Military Veterans and where applicable,
to their dependants.
Compensation
The Department provided 56 military veterans with compensation for injury in military services pay outs as at March 2016.
Counselling benefit
As at 31 March 2016, military veterans and their dependents received counselling services.
Education, training and skills development
As at 2015/16FY, a total of were provided with education support.
During the 2015 academic year, 32 military veterans and their dependants graduated from tertiary education institutions.
By the end of the 2015/16FY, 1 543 military veterans were assisted in accessing training and skills development programmes.
Facilitation of or advice on business opportunities
Under the Business Development Support programme, the DMV provided assistance to 814 military veterans.
Burial support
The DMV provided families of deceased military veterans with burial support, in the 2015/16FY.
In addition, 15 military veterans’ bodies were exhumed and reburied with dignity across the length and breadth of the country.
Housing support
130 houses were handed over to military veterans as follows: 41 in Mpumalanga, 30 in Free State, 52 in Eastern Cape and 07 in North West.
Furthermore, 16 mortgaged houses of military veterans were rescued from repossession from various banking institutions.
"A dignified, unified, empowered and self-sufficient military veterans’ community”

26. PERFORMANCE AGAISNT THE EXECUTIVE AUTHORITY’S PRIORITIES (3)
DMV Contribution linked to Executive Authority’s Priorities
Progress as at 31 March 2016
Priority 5: Promote empowerment programmes for and of Military Veterans:
Roadshows were conducted in 5 provinces (Limpopo, KZN, EC, NC and FS) to reach out to military veterans’ community during the period under review.
 A total of 149 military veterans were assisted to register their companies on the DMV Supply Chain Database and these companies are given preference when procurement of services for military veterans’ events are done.
 The DMV continues to participate in the National Land Acquisition and Recapitalization Committee with the Department of Rural Development and Land Reform (DRDLR).
During the period under review, 8 farms were awarded to military veterans by DRDLR.
Priority 6: Promotion of heritage of Military Veterans and memorialising and honouring Military Veterans
During the period under review, the DMV assisted in the exhumation and reburial of the remains of 15 military veterans.
Priority 7: Maintenance of a credible and secure national Military Veterans database
The DMV is in the process of finalising the electronic system which will be used to administer the registration of military veterans in the National Veterans Military database which is secured and reliable.
As at 31 March 2016, 98% of the military veterans registered on the database are bonafide veterans with force numbers that are verifiable with the Department of Defence (DoD)
Priority 8: Implementation of a high impact communication and marketing strategy and plan
The Department has promoted its benefits and programmes through events management as well as social media and media relations.
These platforms focused on communicating and creating awareness on programmes and on progress made.
"A dignified, unified, empowered and self-sufficient military veterans’ community”

27. Turnaround strategic intervention (tsi)
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28. Turnaround Strategic Intervention (TSI)
Background
TSI established in line with the Executive Authority’s Priorities (8), which are aligned to the Mil Vets mandate, and aim at providing adequate systems and processes
Fully functional Dept of Mil Vets with an independent budget vote and systems (Priority 1)
Strengthening governance and oversight protocols to give effect to the provisons of the Act (Priority 2)
Maintain the credibilitty and security of the national military veterans database (Priority 7)
Implementation of high impact communication and marketing strategy plan (Priority 8)
It is an intervention to address the findings of the Auditor General
It came about from the concerns of Mil Vets who are not getting services from the Dept
Various stakeholders that are concerned about the plight of Mil Vets and their beneficiaries
Its goal is build capacity of the Dept to deliver on its mandate
It is therefore based on grounded empirical data
Most of all, invoice tracking is essential to ensure timeous payment to suppliers/service providers
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29. Turnaround Strategic Intervention (TSI)
Progress to date
TSI conducted a diagnostic exercise and produced a report that identified the challenges and problem areas, presented to the Minister, Deputy Minister and DMV Management
The Diagnostic Report was based on, among others
Thorough analysis of the Auditor General’s Report and Management Letter
DMV Strategic Plan : Annual Performance Plan; Organisational Policies; Min Speech at Mil Vets Indaba; Interviews and engagements with DMV management, etc
TSI determined that AG’s findings were based on:
Absence of management systems
Inadequate financial controls
Absence of policies
Pre-transfers to other State Depts, and as such, procurement policies and regulations were not adhered to
A full set of recommendations has been developed and is being finalised with DMV management. These include but are not limited to:
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30. Turnaround Strategic Intervention (TSI)
Progress todate (cont.)
A new Database Management System
Legislative Review
A new proposed structure that entails operationalisation of Provinces
Supply Chain Change Management Strategy
A full report will be presented to the Joint Standing Committee on Defence and Military Veterans on 28th October 2016
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31. HUMAN RESOURCE MANAGEMENT
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32. Employment and Vacancies
Table Employment and vacancies by programme as on 31 March 2016
Programme
Number of posts on approved establishment
Number of posts filled
Vacancy rate
Number of employees additional to the establishment
1: Administration
103 83
19% 51
2: Socio-Economic Support 20 18
10% 22
3: Empowerment and Stakeholder Management 46 32
30% 5
Total
169
133
22% 78
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33. Thank you
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