This re­ally SUCKS

Crip­pling va­cancy rate in civil ser­vice fu­els multi-mil­lion rand con­sul­tancy racket

Finweek English Edition - - Letters - BY TROYE LUND

AMULTI-MIL­LION RAND con­sul­tancy in­dus­try has been fash­ioned by, and is now feed­ing off, crip­pling va­cancy rates gov­ern­ment is bat­tling to con­tend with at a time when the po­lit­i­cal prom­ise is to step up de­liv­ery – dra­mat­i­cally. Gov­ern­ment man­agers find them­selves with more money than skill. They’re throw­ing money at con­sul­tants to do the job – from the me­nial to core func­tions, fi­nan­cial man­age­ment and in­ter­nal au­dits.

Va­cancy rates (of be­tween 10 and 46%) cou­pled with the fact that de­part­ments aren’t spend­ing any­where near as much on train­ing and per­for­mance in­cen­tives as they are on con­sul­tants, means that of­fi­cials with any skill and am­bi­tion are in­cen­tivised to leave the civil ser­vice and con­tract back to it, at much higher pay.

While the over- and ir­reg­u­lar use of con­sul­tants is reg­u­larly flagged in Au­di­tor Gen­eral re­ports (at na­tional, pro­vin­cial and lo­cal level), the South African Mu­nic­i­pal Work­ers Union’s Jeff Rudin warns that the

gov­ern­ment’s in­creas­ing de­pen­dence on con­sul­tants is a self-per­pet­u­at­ing cir­cle and will re­main so as long as the pay dif­fer­en­tials be­tween the private and pub­lic sec­tors re­main un­changed.

The prob­lem is glar­ing enough to have dom­i­nated a few de­bates at the ANC’s Polok­wane con­fer­ence. The party re­solved to craft a law to reg­u­late a prob­lem that’s es­sen­tially grow­ing a com­mu­nity of con­sul­tants (in num­ber and ex­pe­ri­ence) and leav­ing a gov­ern­ment that’s in­creas­ingly de­pen­dent on pay­ing oth­ers to do its work.

The en­tire turn­around project in the em­bat­tled de­part­ment of home af­fairs, which has been out­sourced to Fever Tree Con­sul­tancy and its in­ter­na­tional coun­ter­part AT Kear­ney, is an ex­am­ple of how few skills gov­ern­ment has at its dis­posal. This con­tract was awarded with­out go­ing out to ten­der. Trea­sury gave per­mis­sion for this to be done based on the ur­gency of the turn­around project as well as the fact that Fever Tree had man­aged the South African Rev­enue Ser­vice turn­around suc­cess­fully and AT Kear­ney had in­ter­na­tional ex­pe­ri­ence with home af­fairs turn­arounds. To be fair, the Pub­lic Fi­nance Man­age­ment Act (PMFA) does al­low for con­tracts to be awarded with­out go­ing to ten­der in an emer­gency and when the con­sul­tant is deemed to be the “sole sup­plier”.

Nev­er­the­less, this three-year con­tract is worth a whop­ping R800m and in­cludes the en­tire turn­around project from IT sys­tems and hu­man re­sources, to com­mu­ni­ca­tions and re­fur­bish­ing of­fices. For­mer politi­cian Cyril Ramaphosa chairs Fever Tree with its co-founder, di­rec­tor and for­mer politi­cian Roelf Meyer.

There are many ex­am­ples of for­mer politi­cians and bu­reau­crats who now work for or have founded con­sul­tan­cies that bid for gov­ern­ment con­tracts. Other mem­bers of the ANC, in­clud­ing its top lead­er­ship, are also in­volved in con­sul­tan­cies. For ex­am­ple, for­mer Pre­mier of Mpumalanga and cur­rent ANC Trea­surer Gen­eral, Mathews Phosa chairs Vela VKE, an en­gi­neer­ing con­sul­tancy that bids and wins for a lot of work across gov­ern­ment, as gov­ern­ment ten­der bul­letins con­firm.

There are also sev­eral high-profile bu­reau­crats who have raised eye­brows be­cause of the work they got in­volved in very soon af­ter leav­ing gov­ern­ment. For ex­am­ple, the Limpopo pro­vin­cial gov­ern­ment’s pub­lic ac­counts (Scopa) com­mit­tee has or­dered Pre­mier Sello Moloto’s of­fice to can­cel two con­tracts that were awarded to for­mer bu­reau­crats. Jack Mokobi, for­mer spe­cial ad­vi­sor to Moloto, re­signed to join a con­sor­tium that won a R115m con­tract to fin­ish build­ing nearly 3 000 houses. Ben Mphahlele re­signed as head of the de­part­ment of fi­nance, eco­nomic af­fairs and de­vel­op­ment to drive this very pro­gramme as a con­sul­tant at a fee of R16m for the two-year con­tract.

Ru­dolf Phala, an ANC mem­ber of the leg­is­la­ture who chairs the prov­ince’s Scopa com­mit­tee, says that he was wait­ing for a re­port from Moloto’s of­fice about whether this in­struc­tion has been fol­lowed. “It is a big prob­lem this. Bu­reau­crats get­ting big con­tracts from the de­part­ments they used to work for. The case of Mphahlele – who headed the de­part­ment for 10 years and then got a con­tract to do the same job one month af­ter he re­signed – makes it ob­vi­ous. He re­signed when he knew he had the con­tract,” says Phala.

What is clear is that there ap­pears to be a di­rect cor­re­la­tion be­tween the va­cancy rate and the use of con­sul­tants. The East­ern Cape’s de­part­ment of health, which spent R464m last year on con­sul­tants, con­trac­tors and spe­cial ser­vices, is a good ex­am­ple. It has a 35% va­cancy rate. In 2006/07 the de­part­ment hired 3 500 new health pro­fes­sion­als. In the same pe­riod 1 700 staff left. In the de­part­ment’s 2006/07 au­dit re­port, the Au­di­tor Gen­eral sin­gles out the use of con­sul­tants, es­pe­cially the reliance on con­sul­tants to do in­ter­nal au­dits (pro­vin­cial au­dit­ing ser­vices, for ex­am­ple, are some of the hard­est hit by the skills short­age and are hav­ing to op­er­ate with a va­cancy rate in ex­cess of 40%).

Aside from ap­point­ing con­sul­tants with­out ad­her­ing to ten­der reg­u­la­tions and pay­ing con­sul­tants with­out their hav­ing com­pleted the job – even mak­ing du­pli­cate pay­ments to them – this pro­vin­cial health de­part­ment out­sourced its in­ter­nal au­dit func­tion to a con­sor­tium of con­sul­tants last year. The R7m con­tract was awarded with bid­ding ir­reg­u­lar­i­ties and, in the end, the con­sul­tants didn’t do a proper job. The Au­di­tor deemed their work to be “in­ad­e­quate” and not com­pli­ant with the In­sti­tute of In­ter­nal Au­di­tors’ Code of Ethics.

The Pub­lic Ser­vice and Ac­count­abil­ity Mon­i­tor’s Jay Kru­use says alarm bells must start ring­ing when de­part­ments have to out­source core or in­ter­nal con­trol func­tions. A lack of skill cou­pled with high va­cancy rates would also mean that there’s an in­abil­ity to mon­i­tor con­sul­tants and en­gage with the work they pro­duced. Last year, for ex­am­ple, the na­tional de­part­ment of trans-

port dis­cov­ered that one of its con­sul­tants had been work­ing with­out a con­tract since 1993. While the na­tional de­part­ment spent R332 830 000 on con­sul­tants last year (com­pared with R223 371 000 the pre­vi­ous year), the KwaZulu-Na­tal de­part­ment of trans­port spent R304 387 157 on con­sul­tants last year against R196 119 308 the pre­vi­ous year. The de­part­ments did not re­spond to ques­tions about this.

An of­fi­cial work­ing at the De­vel­op­ment Bank of South Africa, who also asked not to be named, says: “When con­sul­tants come up with a re­port, of­fi­cials of­ten don’t even read it, they just take the con­sul­tant’s word for it.”

The of­fi­cial agrees with Samwu’s con­tention that mu­nic­i­pal­i­ties that bat­tle with some of the high­est skills short­ages are most re­liant on con­sul­tants, es­pe­cially built-en­vi­ron­ment spe­cial­ists. Min­is­ter in charge of pro­vin­cial and lo­cal gov­ern­ment Syd­ney Mufamadi did not re­spond to ques­tions about con­sul­tants.

On one level, it can be rea­son­ably ar­gued that one of the main ob­jec­tives of bring­ing in con­sul­tants is for them to teach of­fi­cials how to do the work. But that’s clearly not the case. DA rep­re­sen­ta­tive on Scopa in Par­lia­ment, Ed­die Trent, says: “The lack of trans­fer of skills is a fre­quent is­sue. It is al­ways said to be part of the con­sul­tant’s con­tract but the con­sul­tant is back the next year do­ing the same work.”

While there is, of course, no real in­cen­tive for con­sul­tants to im­part skills, Scopa fre­quently ob­jects to ask­ing of­fi­cials ques­tions only to be told that no one knows the an­swers as con­sul­tants have been em­ployed to do the work.

All the same, Home Af­fairs is adamant that the Fever Tree/AT Kear­ney con­tract is struc­tured in a way that will see of­fi­cials learn­ing tan­gi­ble skills from the 165 odd con­sul­tants work­ing in turn­around teams with of­fi­cials. But, chair­per­son of Par­lia­ment’s home af­fairs com­mit­tee, Pa­trick Chauke, has seen one too many con­sul­tants come and go at the de­part­ment. He’s scep­ti­cal and wor­ries about the de­part­ment “col­laps­ing” when the con­sul­tants leave. Re­fer­ring to the Home Af­fairs In­for­ma­tion Sys­tem (Ha­nis), which has been over a decade in the mak­ing and is not yet fully func­tional, he says: “Over 30 con­sul­tants have been in­volved in this and the re­sult is zero. Ev­ery­one is just rush­ing for the money.”

Di­rec­tor of African EPA, Gwen Theron, who con­sults to gov­ern­ment, agrees that de­pen­dence on con­sul­tants is a con­cern, es­pe­cially for func­tions that are core and should be done by gov­ern­ment of­fi­cials. An­other ex-bu­reau­crat who now con­sults back to gov­ern­ment and who spoke to Fin­week on con­di­tion of re­main­ing anony­mous says: “Con­sul­tants are do­ing an ex­tra­or­di­nary amount of core gov­ern­ment work. I have been asked to do pre­sen­ta­tions that a ju­nior bu­reau­crat should be able to do. Con­sul­tants tend to be called in to fix things at the last minute. But, you must un­der­stand that while there are some se­ri­ous ‘skelm’ con­sul­tants, there are also ex­cel­lent ones who pro­duce amaz­ing work. Some re­ally bril­liant work also just goes nowhere be­cause there is no in­ter­nal buy in. There are some real pro­fan­i­ties com­mit­ted in the name of de­liv­ery which, at the mo­ment, is all about num­bers and not at all about ac­tual out­puts.”

“While con­sul­tants are paid slightly more than we could earn in the civil ser­vice, we work ex­tremely hard un­der very tight dead­lines. We are also re­sented and sub­jected to all kinds of non­sense,” says the con­sul­tant, who also stresses how some of­fi­cials had been pro­moted into po­si­tions they could not cope with and so th­ese of­fi­cials tended to fall back on con­sul­tant knowl­edge to get through.

Theron says the lack of ca­pac­ity in sev­eral gov­ern­ment de­part­ments and pro­vin­cial gov­ern­ments is such that when there is a change in leg­is­la­tion, of­fi­cials are of­ten not able to re­view ap­pli­ca­tions so that they are in line with the changes. “A con­sul­tant is

then called in to re­view the work for gov­ern­ment. This con­sul­tant is of­ten privy to al­most copy­righted in­for­ma­tion be­long­ing to other con­trac­tors and of­ten re­view work and ap­pli­ca­tions done by their com­peti­tors,” says Theron, who laments the lack of in­sti­tu­tional knowl­edge re­quired to run a de­part­ment.

There is also the prob­lem of con­sul­tants be­ing em­ployed and, by the time they have com­pleted their work, the civil ser­vant who com­mis­sioned the work is no longer there. Some­one new is run­ning the show. New ap­pointees of­ten scrap the con­sul­tant re­ports and ap­point their own that come up with dif­fer­ent opin­ions. For ex­am­ple, in the City of Tsh­wane a re­port on the qual­ity of life of the city has been over­turned by new of­fi­cials in the en­vi­ron­men­tal unit.

“Peo­ple do not know this. They are go­ing to wake up when they see the trees be­ing re­moved. There is a lack of in­sti­tu­tional knowl­edge and stew­ard­ship in th­ese de­part­ments,” says Theron.

En­ter the prob­lem of those who see an op­por­tu­nity to make quick cash. Deputy Di­rec­tor Gen­eral in the de­part­ment of land af­fairs Mdudusi Sha­bane agrees that: “There are many peo­ple out there who take chances, claim to be con­sul­tants and see this as an op­por­tu­nity to make a quick buck.”

While he con­firms that busi­ness plans writ­ten by con­sul­tants for the Land Bank had been turfed out last year as they were not “worth the pa­per they were writ­ten on”, he points to the prob­lem of gov­ern­ment’s abil­ity to screen what con­sul­tants could do or what they claimed to be able to do. The so-called Land Bank dossier com­piled by the bank’s chief fi­nan­cial of­fi­cer Xo­lile Ncame who was sus­pended by Min­is­ter Lulu Xing­wana two days af­ter pre­sent­ing the dossier to act­ing Land Bank chief ex­ec­u­tive Saki Zamx­aka, re­veals that one con­sul­tant was al­legedly paid R1,6m to test the func­tion­al­ity of fi­nan­cial sys­tems. A sec­ond con­sul­tant al­legedly re­ceived more than R3,3m for “com­mu­ni­ca­tions plan­ning” and a “turn­around strat­egy”.

While ten­der bul­letins also con­firm that there tends to be a flurry of con­tracts awarded and con­sul­tants em­ployed in June each year, politi­cians and bu­reau­crats have been in­structed to tighten up on con­sul­tants. Par­lia­ment’s cor­rec­tional ser­vices port­fo­lio com­mit­tee, for ex­am­ple, has in­structed the de­part­ment that it’s no longer al­lowed to use con­sul­tants, es­pe­cially not those who used to work for the de­part­ment.

“Take re­cruit­ment for ex­am­ple: why was the de­part­ment out­sourc­ing this func­tion when it em­ploys 1 000 peo­ple at head of­fice and has a ded­i­cated hu­man re­sources desk at ev­ery pro­vin­cial of­fice?” says chair of the com­mit­tee Den­nis Bloem, who also ob­jected to the de­part­ment out­sourc­ing pri­mary re­spon­si­bil­i­ties like se­cu­rity at pris­ons. He’s also asked for an in­quiry into why the two private pris­ons in Man­gaung and Khutama Sinthu­mule are run by ex-cor­rec­tional ser­vices of­fi­cers who worked at the de­part­ment head of­fice dur­ing de­lib­er­a­tions on out­sourc­ing ser­vices.

The new di­rec­tor gen­eral of the de­part­ment of wa­ter af­fairs and forestry (dwaf), Pam Yako, is in the process of shift­ing funds set aside for con­trac­tors, con­sul­tants and spe­cial ser­vices so they can be used to fill va­cant posts. Dwaf spend­ing on con­sul­tants bal­looned to R691m last fi­nan­cial year com­pared with R286m the pre­vi­ous year. “This (re­view of pro­ce­dures and shift­ing of funds) will go some way to­ward re­duc­ing the num­ber of con­sul­tants con­tracted to the de­part­ment. We must, how­ever, bear in mind that the short­age of skills be­ing a na­tional con­cern also plays a role,” says Yako, high­light­ing the ten­sion be­tween the in­struc­tion and ex­pec­ta­tion to de­liver and the civil ser­vice’s in­abil­ity to do so with the staff it is able to at­tract and re­tain.

Time will tell if th­ese ini­tia­tives man­age to cir­cum­vent a Catch 22 driven by va­cancy rates, high staff turnovers and skills deficits in gov­ern­ment. An Au­di­tor Gen­eral in­ves­ti­ga­tion into the de­part­ment of trade and in­dus­try’s (27% va­cancy rate) use of con­sul­tants points to an­other as­pect of the prob­lem – ac­tual posts are filled tem­po­rar­ily with con­sul­tants. For ex­am­ple, in 2005, the DTI ap­pointed a con­sul­tant in the va­cant po­si­tion of chief fi­nan­cial of­fi­cer when it “ex­pe­ri­enced dif­fi­cul­ties in fill­ing the po­si­tion”. The two-year con­tract was worth R8,7m. Ac­cord­ing to the AG re­port, the con­sul­tant did not ful­fill the re­quire­ments of his con­tract.

Po­lit­i­cally con­nected. Roelf Meyer

Ques­tion­able ten­der. Cyril Ramaphosa

Be­lieves con­sul­tants im­part skills. No­siviwe Mapisa-Nqakula

Sacked the mes­sen­ger. Lulu Xing­wana

In­quiry into out­sourced ser­vices. Den­nis Bloem Ben­e­fi­ciary of pa­tron­age. Mathews Phosa

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