Department of DefenceFY2011/12 3rd Def Sec Quarter Report

Presentation to the Portfolio Committee on Defence and Military Veterans (MOD&MV)

by the Defence Secretariat (Def Sec)

13 March 2012

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AIMAIM

Briefing on the Department of Defence Performance (FY2011/12 3rd Def Sec Quarter

Report)

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SSCOPECOPE Introduction

Def Sec Programme Overview

Significant Achievements

Obstacles/challenges

Def Sec contribution to: MOD&MV Priorities Def Sec Strategy Map (Outputs)

Trendable Performance Indicators: Estimate of National Expenditure (ENE) Job Creation

Report on Risk Mitigation

Conclusion

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INTRODUCTIONINTRODUCTION

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DEF SEC PROGRAMME OVERVIEWDEF SEC PROGRAMME OVERVIEW The Def Sec consists of the following Sub-Programmes: Departmental Direction* Government Information Technology Officer (GITO) Policy and Planning (Defence Policy, Strategy and

Planning) Financial Services Acquisition Services (Defence Matériel) Defence Supply Chain Integration Defence International Affairs

* Reported under Sub-Programme Policy and Planning

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GITOGITO

Significant Achievements:

Supported the development of the DOD Information and Communication Technology Strategy which was approved by the PDSC on 24 October 2011.

Obstacles/challenges:

Newly identified additional Information and Communication Systems Governance, Risk and Compliance functions.

Additional Promotion of Access to Information Act administrative tasks and functions for which the DEISM Division is not structured for.

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DPSPDPSP Significant Achievements:

DOD Annual Report FY2010/11 was successfully tabled as required by law in Parliament and presented by the Sec Def to the PCD&MV on 18 October 2011.

The Def Sec 2nd Quarterly Performance Report was approved and submitted to the Executive Authority, National Treasury and the Auditor-General in compliance to NT Regulations and guidlines.

Consolidation and institutionalisation of the Enterprise Risk Management (ERM) in the DOD as evidenced by the NT rating of the DOD ERM maturity level to 4, beyond the FY2011/12 target of 3.

Co-ordination and consolidation of the DOD input to the revised White Paper on South Africa’s Participation in International Peace Missions for submission to the C SANDF for consideration.

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DPSPDPSP Significant Achievements (cont):

Provided key personnel to the Defence Review Technical Secretariat and the Defence Review Resource Groups.

The Regulations to the National Conventional Arms Control Amendment Act, (Act 73 of 2008) have been submitted to the State Law Advisor for certification.

Prepared and submitted the National Conventional Arms Control Committee’s (NCACC) 3rd quarterly report as prescribed by the NCAC Act, (Act 41 of 2002) to the NCACC.

Obstacles/challenges:

The lack of office accommodation, limited financial resources and a slow staffing process remains a challenge.

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FINANCIAL SERVICESFINANCIAL SERVICES

Significant Achievements:

The conclusion and consolidation of the post Audit Action Plan to rectify all adverse findings of the Auditor–General.

Institutionalisation of Operation Clean Audit.

Obstacles/challenges:

Slow responses to audit enquiries by some Services and Divisions remains one of the key impediments to creating a smooth auditing process management environment.

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DEFENCE MATÉRIELDEFENCE MATÉRIEL Significant Achievements:

The Operational Test and Evaluation (OT&E) of Project GUARDIAN (Ground-Based Air Defence System) was successfully completed and some of the equipment was successfully deployed as part of Exercise NDLOVU.

4 x Gripen fighter aircraft arrived in Cape Town harbour on 07 October 2011, bringing the total delivered in South Africa to 22. The final four aircraft will remain in Sweden after acceptance at the factory to enable 2 Squadron to participate in an international exercise with Sweden, Hungary and Czech Republic during March/April 2012.

The Escape Training Facility of Project WILLS (Submarine Capability) was ceremonially opened by the Deputy Minister of Defence and Military Veterans on 07 October 2011.

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DEFENCE MATÉRIELDEFENCE MATÉRIEL Significant Achievements (cont):

The BIO-CHEM Laboratory (Biological and Chemical) for field experimentation was handed over from ARMSCOR to SAMHS. This Lab will enhance the defensive capability against chemical and biological weapons, as well as toxic industrial chemicals, both on the battlefield and in the urban environment. Subsequently this biochemical lab won the Armscor Chairpersons Award for the best project.

Obstacles/challenges:

Delays in acquisition approval process hampers achievement of project milestones and related cash-flow on the Special Defence Account (SDA).

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DEF SUPPLY CHAIN INTEGRATIONDEF SUPPLY CHAIN INTEGRATION Significant Achievements:

Negotiated a contract with a private air evacuation company based in Kenya to be ready to evacuate the RSA contingents on all non United Nation Support Missions.

Participated in the DOD Delegation that visited the UN Mission in the DRC to discuss logistics challenges faced by the RSA contingent. The UN Force Commander has offered to assist the delegation with solutions to the raised challenges.

DSCI members attended the IBSA Defence Committee Meeting at Aerosud in the RSA. The meeting was facilitated by the RSA Defence Industry Association. The Defence Committee Meeting was successful and all representatives found common ground and developed a report that formed part of the Action Plan between the President of India, Brazil and RSA.

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DEF SUPPLY CHAIN INTEGRATIONDEF SUPPLY CHAIN INTEGRATION Obstacles/challenges:

The Division cannot cope with the E-Proqure tool function as it is outside its mandate given its situation of staff shortage.

The call-up of a Reserve Force member to manage the E-Proqure has alleviated the pressure on the Dir Mat GRC.

It is emphasized that this system must be handed over to C LOG as system owner.

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DEF INTERNATIONAL AFFAIRSDEF INTERNATIONAL AFFAIRS Significant Achievements:

The following agreements were signed during this period:

Memorandum of Understanding (MOU) on African Union (AU) Special Task Force in Burundi on 26 October 2011.

Exchange of the Terms of Reference between the RSA and Benin over the period 23 to 24 November 2011.

Trilateral MOU between the RSA, Mozambique and Tanzania on Maritime Security on 15 December 2011.

The Agreement on Defence co-operation between RSA and United Arab Emirates (UAE) on the occasion of President Jacob Zuma’s State Visit to UAE and Sultan Oman over the period 11 to 17 November 2011.

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DEF INTERNATIONAL AFFAIRSDEF INTERNATIONAL AFFAIRS Obstacles/challenges:

• The continued use of outdated software in the DOD results in interdepartmental communication problems as documentation cannot be readily accessed and/or read by DOD incumbents.

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DEF SEC CONTRIBUTION TO DEF SEC CONTRIBUTION TO MOD&MV PRIORITIESMOD&MV PRIORITIES

(MOD&MV) Priorities Performance Indicator Annual Target 2011/12

Quarterly Achieved Target Planned Management Interventions

Execution of the Border Safeguarding Function.

Approved DOD Border Management Strategy

Approved Strategy on Border Safeguarding taken up in the Defence Review process.

None

Enhancement of the SANDF’s Landward Defence Capabilities.

Landward Capability requirement approved (Approved Defence Strategy)

Drafted Take Note: Forms part of Defence Review/Strategy

Defence Review Committee supported in terms of:• Budget• Secretariat support• Work of the Resource Group

N/ATake Note: Draft 0001E was completed on 2 June 2011.

% funding allocation received for approved DOD Strategic Defence Packages (Air and Maritime)

100% 100% N/A

Job Creation. Creation of job opportunities in the Defence industry according to DOD projects

TBDThe target will be

determined during the drafting of the White Paper on Defence

Industry

2073 permits were issued during the quarter at a value of approximately Rbn15

N/A.

Revitalisation of the Reserves.

Approval of Reserve Force Amended Legislation

Approved Defence Amendment Act, (Act 22 of 2010) promulgated

N/A

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DEF SEC CONTRIBUTION TO DEF SEC CONTRIBUTION TO MOD&MV PRIORITIESMOD&MV PRIORITIES

(MOD&MV) Priorities Performance Indicator Annual Target 2011/12 Quarterly Achieved Target Planned Management Interventions

Restructuring and Support of the Defence Industry.

Approved National Defence Security Strategy

Approved in consultation with SA

Security Services

The contribution of Defence to the National Security Strategy has been taken up in the Defence Review process

N/A

Approved White Paper on Defence Industry

Approved During this quarter C Def Mat held a meeting (early Dec 2011) with representatives from other relevant Government Departments to discuss progress to date, the proposed concept and the way ahead. During the meeting the future involvement of other Government Departments was discussed ito their participation in the development and approval process of the Defence Industry Strategy.

Progress with the drafting of the Defence Industry Strategy is contingent on the development of Defence Industry Policy (White Paper) and to some extent on the Defence Review (in progress).

Approved Defence Review/Strategy Strategy Drafted Defence Review Committee supported in terms of:• Budget• Secretariat support• Work of the Resource Group

N/ATake Note: Draft 0001E was completed on 2 June 2011.

Department of Defence Works Capability.

Establishment of a DOD Works Capability function (Strategic Direction)

Approval of the DOD Works Capability

Structure

Report completed and submitted into the approval process.

N/A

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TRENDABLE PERFORMANCE TRENDABLE PERFORMANCE INDICATORS: ENEINDICATORS: ENE

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Performance Indicator Annual Target 2011/12 Progress and Interventions

Finalisation of the DOD Border Management Strategy. Approved Strategy on Border Safeguarding taken up In the Defence Review.

Throughput in terms of the DOD National Youth Service concept. 1 500 1 277 youth members completed training at SAS SALDANHA

Approved DOD anti-corruption Policy. Approved In Progress

Percentage litigation settlement in favour of the DOD. 50% 14%

Institutionalisation of the Defence Force Service Commission. Establishment (Implementation)

HR Division is currently in the process of developing the following OSD’s:Engineers, technicians, Technologists and ArtisansFire and rescue WorkersPilots, Navigators and Air Traffic ControllersCombat Officers, Divers, Submarines, Surface Vessel Operators and Hydrographic SurveyorsIntelligence OperatorsSpecial Force Operators

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TRENDABLE PERFORMANCE TRENDABLE PERFORMANCE INDICATORS: JOB CREATIONINDICATORS: JOB CREATION

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Performance Indicator Annual Target 2011/12 Progress and Interventions

Members in the MSDS per year. 11 140 8 823 MSDS in system as at 31 December 2011

Number of active Reserves per year. 16 400 12 105 active Reserves utilised (Year to Date)

Throughput in terms of the DOD National Youth Service concept. 1 500 1 277 youth members completed training at SAS SALDANHA

% Vacant funded post filled by June 2011. 100% 87% funded vacant posts filled as at 31 December 2011

% Decline in turn-over rates. 6% 0,33% turnover rate (Year to Date)

Establishment of a DOD Works Capability function (Strategic Direction).

Approval of the DOD Works Capability

Structure

Report completed and submitted into the approval process.

Creation of job opportunities in the Defence industry according to DOD projects.

TBDThe target will be

determined during the drafting of the White Paper on Defence

Industry

2073 permits were issued during the quarter at a value of approximately Rbn15

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REPORT ON RISK MITIGATIONREPORT ON RISK MITIGATION

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Responsible Division

Risk Description Mitigating Strategy/Action Progress and Interventions

GITO (supported by CMIS & CFO)

The non-integration of DOD IT systems. The non-integration of information systems (Finance, Supply Chain Management and Human Resources systems) and inadequate information technology network has a negative impact on the DOD’s performance.

Risk transferred to the DOD Strategic Risk Register as part of the DOD Strategic ICT Risks that should be mitigated by the DOD ICT Strategy.

The DOD ICT Strategy that will enable the effective and efficient alignment of all legacy and new ICT requirements in support of the DOD's business requirement was completed and approved by the PDSC on 24 October 2011. Implementation plans to be executed as from 01 April 2012 by CMIS Division in accordance with short, medium and long term initiatives specified in the DOD ICT Strategy.Progress wrt the implementation plans will be monitored in accordance with the DOD Information Strategy Control Plan.

HoSCI (supported by C Log, GITO, CMIS & CFO)

Full Compliance with Regulatory Framework. The DOD’s inability to fully comply with the regulatory framework requirements in respect of accounting and supply chain management.

Implementation of best practice supply chain and life cycle management.The acquisition of a single logistic information management system that is compliant with National Treasury and Auditor-General reporting requirements is being investigated. Until then, manual work-around and enhancements of legacy defence logistics systems are being implemented.

DSCI has continued to conduct compliance audits in the various SANDF supply chain units. The compliance reports together with corrective actions are discussed with service heads.

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CONCLUSIONCONCLUSION

“Quarterly Reporting is a key element of the Strategic Control process and provides

management information to top management.”

- PFMA, 1999 -