1. Presentation to the Portfolio Committee on the Appointment and Utilisation of Consultants Report of the Auditor-General dated August 2002
30 October 2002

2. Introduction Four main reports regarding consultants
Performance audit of the acquisition and utilisation of consultancy services in the PS - June 1996
Use of Consultants in the PS - June 2001 (Cabinet resolutions, progress with implementation)
Performance audit Gauteng provincial administration - September 2001 (Presented at SCOPA Gauteng, workshop with Committee and HODs)
Appointment and utilisation of consultants at certain national departments and provincial administrations - August 2002

3. Purpose of Presentation
Facilitate public accountability by bringing audit findings as well as suggested corrective measures to the attention of Parliament
Indicate progress with corrective measures concerning consultants in the PS

4. Key Focus Areas
Appointment and use of consultants
Monitoring and control of performance
Responsibilities of Departments and implementation
Interventions implemented and envisaged by the DPSA

5. Appointment and use of consultants: Consider alternatives
Alternative ways of addressing needs such as training and capacity building not always considered -
Consider filling of vacant posts, setting productivity standards for staff, networking, information sharing and work overtime

6. Appointment and use of consultants: Procurement
Sound procurement principles not always applied - comparing tenders not only on the basis of price but also functionality, expertise and knowledge of tenderers
Strengthening existing guidelines and procurement procedures for consultants and determining national norms and standards.
National Treasury is finalising Standardised Operational Procedures for Supply Chain Management, which will include procedures for the appointment of Consultants. Procurement reform pertaining to consultants focuses on promoting competitive tendering and improving the quality of consulting work and contract management

7. Appointment and use of consultants: Competencies of Consultants
Appointed without required experience of competencies
Competencies not evaluated before awarding tender
Resulted in staff having to be withdrawn from their functions to assist the consultants

8. Appointment and use of consultants: Competencies of Consultants
Greater awareness of the internal cost of own staff's time in providing information and managing relationships
References of consultants should be followed up
Require consultants to provide proof of previous successes and the knowledge of consultants should be tested when tenders are evaluated
The DPSA should consider introducing a code of conduct or system of accreditation

9. Appointment and use of consultants: Transfer of skills
Contracts and TOR’s do not always provide for skills transfer
Capacity building not closely monitored
Provide opportunities for staff to learn from consultants by creating mixed teams
Consider how the DPSA and the SAMDI could assist departments to follow best practice frameworks for skills transfer

10. Appointment and use of consultants: Appointment permanent basis
Appointed on a permanent basis or contract periods were continually extended
This often resulted in the approved establishment being extended and departments becoming reliant on consultants to perform certain primary functions

11. Appointment and use of consultants: Appointment permanent basis
Vacancies must be filled as soon as possible
The duration of the appointment of consultant must be limited to a reasonable period to ensure that the position is filled
Consider cost-effectiveness of the appointment of consultants compared to the filling of vacant posts
The DPSA should evaluate remuneration structures for positions in the public service in terms of similar job descriptions and remuneration structures in the private sector

12. Appointment and use of consultants: Unclear need of appointment
Lack of detailed specification of -
the services required
available resources
intended outcomes or product
required expertise
timetable for completion
long-term implications and risks
Tenders was extended thus not complying with the requirements of transparent, fair and competitive procurement

13. Appointment and use of consultants: Unclear need of appointment
Rigorous assessment of the need to appoint consultants with prove of not meeting challenges internally
Prospective tenders are appropriately briefed and the nature, outcomes, responsibilities and time frame of the work is clear
Provide TOR’s that serve as a guide to consultants regarding the size and scope of the work.

14. Performance Monitoring and Control
Poor monitoring and verification of
consultants’ performance
progress with projects
extent to which set objectives were achieved before payments are made
Thus the impact of the work of consultants on service delivery were not evaluated

15. Performance Monitoring and Control
Undertake more regular evaluations while an assignment is in progress and when it has been completed
Link consultants’ remuneration to achieved performance
Evaluate performance by independent internal auditors
Disseminate and implement lessons learned from evaluations.

16. Responsibilities of and Implementation by Departments
Departments did not create an environment where consultants could perform their duties effectively
Interventions proposed were not always implemented due to -
inadequate human or financial resources
a lack of commitment
lack of computer skills

17. Responsibilities of and Implementation by Departments
Create organisational climate and put processes in place that are supportive to achieving the objective for which the consultant was appointed
Assess capacity to absorb outside assistance and implement proposals before tender specifications are finalised
Management should accept ownership of the business plan before the project starts

18. Interventions implemented and envisaged by the DPSA
Conducted research on the use of consultants in the Public Service - Report published and presented to Cabinet
The findings of the research are similar to those made by the AG in this and previous performance reports
Departments were informed to have approved guidelines on the use and management of consultants with due consideration to specific issues raised in the Report (compliance audit by sampling 10 Departments)
These guidelines must take into consideration the different issues raised in the study on the use of consultants and must focus on the following specific issues:
• Departments must undertake an institutional assessment of capacity to absorb outside assistance, to give effect to the implementation of proposals and to manage the consultants before tenders are issued.
• Departments must prepare sound and realistic tender specifications, which match the ability to implement and sustain the outcomes of projects.
• Skills transfer should be included in the contracts and must be monitored.
• Audit committees must undertake regular performance audits of consulting assignments.
• Intellectual property issues must be clarified in the contracting stage and must be shared across government.
• Departments must assess the total cost of using consultants in relation to cost-effectiveness before a decision is made to appoint a consultant.
• Total cost should not only include professional fees and subsistence, but also costs such as the use of government offices and equipment, impact of fluctuations in the exchange rates (where applicable), the time that public servants make available to work with consultants, the time it takes to prepare and evaluate tenders and appoint and manage consultants.

19. Interventions implemented and envisaged by the DPSA
Amending the Public Service Regulations to (June 2002) to provide for -
A definition of a consultant
Departments to report in their annual reports on the use of consultants
The MPSA to determine the format for reporting in annual reports
The MPSA approved the format in which departments must report in their annual reports, namely -
Report and analysis of consultant appointments using appropriated funds and donor funds, including historically disadvantaged individuals
In terms of Public Service Regulation J.3, Part III: Planning, Work Organisation and Reporting of Chapter 1 of the Public Service Regulations, 2001, a consultant means "a natural or juristic person or a partnership who or which provides in terms of a specific contract on an ad hoc basis any of the following professional services to a Department against remuneration received from any source:
(a) The rendering of expert advice;
(b) the drafting of proposals for the execution of specific tasks; and
(c) the execution of specific tasks which is of a technical or intellectual nature,
but excludes an employee of a Department".

20. Interventions implemented and envisaged by the DPSA
Provided substantive inputs into the draft National Treasury procurement framework, which will include procedures for the appointment and management of consultants
Finalising a Guide on hourly fee rates for consultants based on PS remuneration levels
Finalising a data base of 2113 consultant reports produced for the Public Service that will be made available to Departments
The National Treasury is finalising Standardised Operational Procedures for Supply Chain Management, which will include procedures for the appointment of Consultants. Procurement reform pertaining to consultants focuses on promoting competitive tendering and improving the quality of consulting work and contract management. Only in exceptional cases where it is impractical or impossible to appoint consultants on a competitive basis will Departments be allowed to obtain the services of consultants by other methods. This Guide will form part of the mentioned Standard Operating Procedures in cases where consultants can not be appointed on a competitive basis..

21. Summary
The DPSA is continuing to work with the Office of the AG and the National Treasury in order to promote the efficient and effective use of consultants in the Public Service in support of service delivery to our citizens
The National Treasury is finalising Standardised Operational Procedures for Supply Chain Management, which will include procedures for the appointment of Consultants. Procurement reform pertaining to consultants focuses on promoting competitive tendering and improving the quality of consulting work and contract management. Only in exceptional cases where it is impractical or impossible to appoint consultants on a competitive basis will Departments be allowed to obtain the services of consultants by other methods. This Guide will form part of the mentioned Standard Operating Procedures in cases where consultants can not be appointed on a competitive basis..