Portfolio Committee on Finance

17 May 2005


Report of the Portfolio Committee on Finance on its oversight hearing of the Statistics South Africa (StatsSA).

The Portfolio Committee on Finance, having considered StatsSA strategic plan for 2005/06 – 2009/10 and its operational budget and MTEF for 2005/08 and the related presentations by the Statistician General report as follows.

  1. Introduction
  2. The Statistician General was invited to make a presentation of StatsSA’s strategic plan and medium term budget requirements. The Committee commended StatsSA on a much improved strategic plan but raised a number of questions related to the presentation, the strategic plan and the budget. These are summarised below.

  3. Issues raised by the Committee
  4. In its deliberations of StatsSA’s strategic plan, and the presentation by the Statistician General, the Committee raised the following issues:

    1. Quality control and credibility
    2. The Committee enquired as to what steps StatsSA was taking to ensure quality control in the collection and reporting of statistical information that ensured StatsSA regained its credibility. The issue of quality control, producing quality statistics and credibility is of grave concern to the Committee. Of particular concern with respect to quality control was the use of postal surveys to collect data. With respect to the credibility of the statistics reported by StatsSA, the Committee enquired whether StatsSA is able to defend and explain their new methodologies.

      The Statistician General and representatives of StatsSA acknowledged the Committee’s concern about quality control and said they are on a continual and incremental path of improving the quality of the statistics they were reporting.

      StatsSA is transforming their approaches to data collection and while this transformation process continues they will use a number of what are now outdated techniques but will run these in parallel with more modern approaches. Therefore postal surveys are not the only technique used, but are part of a portfolio of approaches used to collect data. While the adjustment to the new techniques are under way errors may be made as processes are refined.

      StatsSA is engaging with international bodies such as the IMF, EU and Rosc commission and Standard and Poor to find ways in which systems and techniques can be improved.

      The Statistician General mentioned that it is important that StatsSA be open and honest about mistakes made to help build confidence. He felt that StatsSA should be compared to its peers; for instance very few countries report the Consumer Price Index on a monthly basis.

      StatsSA commented that they are working with the media to ensure that its findings are reported accurately. StatsSA also has intentions to train journalists. This process will ensure that findings of new methodologies are better communicated than in the past and no longer create controversy.

      StatsSA commented that their ability to report accurate information for a number of sectors was largely at the mercy of departments’ ability to supply the information. StatsSA are working closely with departments so that they can provide StatsSA with quality information and also enable StatsSA to provide them with information they are able to use. A key department is the Department of Home Affairs where there is a project to construct the population register, however this is fraught with challenges.

      The Statistician General commented that they are making incremental improvements in collecting data as they become better at managing the sampling frames they use. StatsSA is also adopting a strategy of sticking to the vision of "preferred provider of quality statistics" and focusing on that and not getting involved in unnecessary activities.

    3. Capacity building
    4. The Committee asked StatsSA what their approach to building capacity is to ensure that StatsSA has the necessary skills in-house to collect the relevant data.

      The Statistician General responded that they used international consultants, particularly from Australia and Canada, to transfer skills and are working with various education institutions in South Africa and elsewhere in Africa to develop the necessary skills. The Statistician General commented that the individuals in StatsSA have to be "eager" to learn and acknowledged StatsSA needs a more systematic approach. StatsSA is also implementing specific steps to improve the quality of statistics such as weekly question and answer sessions. The weekly sessions should help StatsSA to transform staff from being good statisticians to being good statisticians that can make sense of economic and social information.

    5. The quality of information collected during Community Surveys
    6. The Committee felt StatsSA did not take sufficient steps to ensure that the staff that conducted community surveys were adequately trained to deal with the situations and frustrations they would be faced with. The Committee asked how StatsSA will ensure this is run more professionally in the future. The Committee asked that StatsSA look at ways to get around challenges they are facing such as "high walls" that are compromising their ability to collect quality data and implement techniques that assure StatsSA reports quality information. The Committee asked if they could report on the state of development and specifics in terms of municipal prioritization.

      StatsSA responded by asking that they be allowed to investigate reasons for unprofessional or poor conduct in the collection of data for community surveys as they themselves were trying to establish reasons for this. StatsSA also asked that they be given time to refine their sampling techniques as they are applying new methodologies to get around the problems they are facing. Some of these techniques are proving to be successful, such as the new diaries approach and the point of sale approach, but these techniques produce new types of data that differ from the old data sets, and these differences need to be understood by users.

    7. New Methodologies and "Compliance"
    8. The Committee felt StatsSA needed to explain what it referred to as compliance and what the new methodologies are.

      The Statistician General responded by saying they have a new Swedish system for approving methodologies that explains how the methodology should be implemented on a step-by-step basis. They are also using a framework provided by the Rosc Commission that provides a multi-dimensional basis on which compliance is measured.

    9. Tabling and reporting on Measurable objectives and targets
    10. The Committee commented that StatsSA’s targets and measurable objectives shown in the strategic plan this year showed no continuity from the strategic plan tabled last year. The Committee enquired how StatsSA is going to measure its performance and report on that performance. The Committee wanted to know how well StatsSA had reached its targets set in the previous year.

      The Statistician responded by saying that StatsSA had met most of the targets set in the previous strategic plan and in fact very few had not being met. The Statistician General also stressed that new methodologies were being implemented and the way in which the implementation of these were being implemented need to be explained and understood and hence some of the measurable objectives may appear poorly constructed at this time.

    11. Improvements on Qualified Audit Report
    12. The Committee enquired what progress StatsSA had made on resolving the issues that resulted in the entity getting a qualified audit opinion and how they would ensure that they would achieve an unqualified audit opinion in the future. The Committee also asked what StatsSA was doing to ensure compliance with the Public Finance Management Act.

      The Statistician General responded by saying that StatsSA was making progress on improving processes, systems and organizational structures to ensure that they received an unqualified audit opinion and were continually improving their compliance with the PFMA. However Census 2001 put StatsSA under tremendous strain that affected systems and this caused the qualified audit opinion. It also put strain on StatsSA’s implementation of the PFMA.

    13. Improving financial management and information technology systems
    14. The Committee asked StatsSA what steps it was taking to improve its financial management systems and information technology systems.

      StatsSA noted that the information technology systems were an issue of critical concern and they have hired consultants to assist in identifying appropriate software. StatsSA commented that one of the biggest problems caused by the current system was that there were too many users with access that allowed them to edit the data and differences in systems that required formatting that caused data to be lost during transfers and formatting processes.

    15. Statement from the Council
    16. The Committee noted the strategic plan referred to the Council yet did not include an official statement from the Council. The Committee asked StatsSA to explain the role of the Council and who sits on the Council.

      StatsSA indicated that the Council will have 25 members. There are nine members from provinces; one from each province as nominated by the premiers. The rest of the members belong to interest groups e.g. organized labour. These interest groups must show a particular interest in the production and use of data. The Council will advise the Statistician General, the Minister, interest groups, organs of state etc on matters relating to statistical data. This could be matters of production, analysis, storage etc. After StatsSA met with the Committee in Parliament in October 2004 they met with the Council and agreed on broad levels of work that the Council will take interest in and they will leave the instruments of measurement for StatsSA to implement. The Council must produce an annual report that they will submit to the Statistician General and Minister indicating issues of concern. The Minister should then report to Parliament on what issues were accepted and which weren’t and give reasons for the areas of advice that were not adopted. At this stage the members are still advising on their ability to serve. Once this process is finalized StatsSA will engage with the Council and find ways to work constructively with it.

    17. The position of the Deputy Director General
    18. The Committee enquired what the position of the current Deputy Director General was, and what is being planned to find a replacement.

      The Statistician General explained that the DDG is currently suspended and subject to disciplinary proceedings. Due to these proceedings there will be time delays before the next DDG can be appointed. The Statistician General noted that this is causing problems as many staff are in acting positions which is not helpful.

    19. The quality of StatsSA’s budgeting processes
    20. The Committee enquired why the budget totals fluctuated so considerable and what the reasons are for the overspending of budget totals, under-spending on some programmes and no allocations for important programmes. The Committee expressed particular concern about the funding for the cause of death survey.

      The Statistician General noted that the recent fluctuations in the budget can be attributed to the decision not to run Census 2006, but rather Census 2011. Now that the processing of Census 2001 is complete the budget allocations have dropped considerably. The fluctuations in programme budgets can be attributed to the project nature of the work StatsSA does and the change from the census to conducting the community surveys. StatsSA commented that the Department of Health did not participate fully in the cause of death survey and that is why sufficient budget allocations were not made for that project.

    21. Ensuring the use of the information
    22. The Committee enquired what measures are being put in place to ensure that they tracked the usefulness of information to users and what steps were being taken to ensure that the information is accessible to small, micro and medium enterprises, the informal sector, schools and health institutions.

      The Statistician General responded that StatsSA has been performing a survey on the usefulness of the data, but at this time the results will not be made public, as trends cannot yet be established. StatsSA has established sophisticated technology to ensure that information is easily accessible and they believe they have developed information that is very useful to the Department of Trade and Industry for SMMEs. The Statistician General stressed that it is important that other departments co-operate with StatsSA to help collect data, ensure the usefulness of data, limit duplication and also suggested that each department have their own statistician that can assist StatsSA with collecting necessary data. The Statistician General commented that there was a need for the various departments and municipalities to access and use the data. The Statistician General also commented on the success of census@schools saying it has been successful in collecting information and getting children to learn to play with the data.

      StatsSA commented that they are recording the number of enquiries made by the public for specific information and proactively communicating with stakeholders, through road shows and pamphlets, to create awareness of the statistics and feedback mechanisms available.

    23. Construction industry and trade flows information
    24. The Committee enquired how StatsSA is ensuring that accurate information for the construction industry will be collected and why information on trade flows is not being collected by StatsSA.

      StatsSA indicated that they are aware that existing techniques to capture information on the construction industry are not optimal. StatsSA commented that due to the nature of the work in that industry it is very difficult to accurately capture construction industry information but they were examining international practices to establish a better approach. StatsSA stated that SARS and the Department of Trade and Industry collect trade information and that is where they got their trade information.

    25. Use of consultants
    26. The Committee noted that there was an alarmingly high ratio of consultants in StatsSA.

      The Statistician General noted that the consultants are actually temporary employees, but are called consultants to indicate they are not employed on a full time basis. StatsSA uses few consultants on a permanent basis.

    27. The necessity of another census

    The Committee asked if it is in fact necessary to have another census when new sampling frames and collection techniques are being used.

    StatsSA responded that it is necessary for a Census to be performed as these new techniques and sampling frames do not ensure that every single citizen is counted.

  5. Committee recommendations

Based on its deliberations the Committee makes the following recommendations:

  1. StatsSA must continue to focus on improving the quality of statistics produced as many of these statistics are of national interest and the accuracy of their reporting has considerable economic significance. The role of the Statistics Council in ensuring quality also needs to be clarified.
  2. StatsSA must ensure it develops appropriate performance measures in its strategic plan. These measures must be easily understood, foster accountability and strengthen credibility.
  3. StatsSA must develop and implement a more systematic and targeted approach to building its capacity and ensuring there is proper succession management. The Committee would like to receive a plan dealing with these issues by October 2005.
  4. StatsSA must take steps to reduce the number of temporary employees, and that where appropriate people are offered permanent positions.
  5. StatsSA must provide the Committee with the outcomes of the research it is doing regarding the identification of appropriate technologies for processing, warehousing and providing access to its data.
  6. StatsSA must provide the Committee with a report detailing the steps that are being taken to address the issues that gave rise to the entity receiving a qualified audit opinion.