MPs disconsolate on defence annual report

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Members of Parliament (MPs) are concerned at the state of the defence department following a reading of its latest annual report.
Democratic Alliance (DA) public accounts spokesman Eddie Trent says the report, available on the Department of Defence`s website, shows that the Auditor General is again dissatisfied with the department`s accounts.
The report was tabled in Parliament last week, just days after the resignation of defence minister Mosiuoa Lekota in sympathy with the recall of President Thabo Mbeki. Deputy minister Mluleki George also resigned.
Charles Nqakula – previously Mbeki`s police minister – and his new deputy Fezile Bhengu, until recently the chairman of the National Assembly`s Portfolio Committee on Defence (PCOD), will now be called by the Standing Committee on Public Accounts (Scopa) to explain why the department has been given a qualified audit opinion for a fourth consecutive year.
Compounding the leadership vacuum is Tsepe Motumi, now acting Defence Secretary, following the death of January Masilela in a car crash in August. Motumi had been heading the DoD`s international affairs division.
Trent says “once again there are substantial and serious areas for concern” in the report. Highlighting six, he said internal controls remained weak and the department was still making inadequate use of asset registers. A second concern is the absence of sufficient audit evidence related to DoD`s capped leave commitment R865 390000, while contingent liabilities have been misstated. “Last year this amount was R1.5 million while this year`s report shows the amount as R504.8 million, Trent says.
Other issues include disclosed accruals not including goods and services for which no invoice had been received; lease commitments that could not be confirmed; and the absence of appropriate audit evidence for DoD revenue.
“It is clear that the DoD has not taken note of Scopa resolutions in the past on these matters,” Trent adds. “There is still a great deal of room for improvement within the DoD with regard to financial management and deficiencies in internal controls.”
“Serious questions must be asked of the DoD in respect of why internal controls appear to be absent or functioning improperly. I will ask my colleagues at Scopa to take a more active role in the solving of these issues by calling the new Minister of Defence to accompany the DoD to a Scopa hearing.”
“It is imperative that the Minister be made aware of the problems and the solutions thereto as soon as possible. Given the critical importance of the DoD in national matters, it is vital that the department be run according to the strictest management principles. Scopa clearly has a role to play in assisting the new minister to focus on these pressing issues,” Trent added further.
Gerhard Koornhof, the ruling African National Congress` PCOD study group leader, also expressed concern over the AG`s remarks and the qualified audit.
Vacancies
Meanwhile, DA defence spokesman Rafeek Shah is concerned at the level of vacancies in the department and in the SA National Defence Force (SANDF), “which may be compromising our national security.”
Quoting the report, Shah says the SANDF has an overall post vacancy rate of 15.3%. Critical vacancy levels included:
·         37.45% in Defence Intelligence;
·         30.32% in Joint Support (peace support operations);
·         30.08% in Force Employment; and
·         16.20% in Air Defence.
The most critical occupations vacancy rates in the year to 31 March 2008 were:
·         42.75% in engineers;
·         36.95% in aircrew;
·         30.79% in air space control;
·         27.24% in anti-aircraft.
·         26.84% in nursing; and
·         18.50% in artillery.
“What these vacancy figures mean is that our military`s force readiness and capacity to respond to internal and external requirements is substantially compromised,” Shah says.
“Not only are we facing serious issues with equipment suitability and resource shortages, but our day-to-day military functions are also not operating at full capacity. Such vacancy issues must also be affecting our ability to make use of the [Strategic Defence Package] procurements,” he added in reference to the 1999 acquisition of four frigates, three submarines, 50 fighter aircraft and 34 light helicopters.
  
“People with skills and expertise are leaving the SANDF for greener pastures. With better retention strategies, we could be motivating such people to stay, instead of incurring the costs of replacing them. 
“Last year alone, more than 6700 people left the SANDF and 1660 of these were from critical occupations,” Shah charged.
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He called on Nqakula to show that he “means business by telling South Africa what he intends to do to resolve the problem.”
Defence Update
Part of the answer may lie in the department`s long-delayed Defence Update and in the revision of the Human Resources 2010 strategy. Lekota`s departure and Masilela`s death has likely set back the completion of both as the department`s new leadership will first have to agree to the policies and will then have to champion them before Cabinet and Parliament.
But defence industrialist Richard Young says another part of the answer lies in increasing the defence budget, currently only about 5% of government spending. Citing the SA Navy as example, he says just “somewhat more than R720 million” would be necessary to support, crew and keep the fleet at sea.   
       
“While the country does indeed have many spending priorities, the only way that the acquisition of the new frigates and submarines can be justified is if they are optimally utilised and they simply cannot be without an adequate running budget,” he says.
“Indeed, in my view, a reasonably modest increase … will allow the Navy to do its job properly while representing a minuscule fraction of the overall budget.”
Young says the Navy` entire running budget is currently R1.8 billion a year. By contrast, the state`s total budget is R533 billion and defence`s share R26 billion. He says the Navy`s share is “is a very modest amount to operate and support more than a dozen medium to large vessels, including four ultra-sophisticated guided missile frigates and three modern coastal attack submarines.”
As a result, “there`s not enough money to retain engineering and other technical skills, in order to carry out the required work, as well as insufficient funds for other necessary support expenditure.
“Under the circumstances the Navy is actually doing a sterling job overall, but this surely cannot be sustained long-term, especially if the Navy gets more vessels to compliment and complete the force,” he says with reference to Navy plans to acquire a new class of multipurpose offshore patrol vessel as well as one or more “strategic support ships”.  
The ministry was asked for a response to these concerns but had not done so by the time of publication.
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