Budgetary Review and Recommendation Report of the Portfolio Committee on
Public Works on the Department of Public Works for the 2011/12 financial year, dated
23 October 2012.
The Portfolio Committee on Public Works, having
considered the relevant reports and the Annual Report of the Department of
Public Works for 2011/12, reports as follows:
1.
Introduction
The Budgetary Review and Recommendation Report
of the Portfolio Committee on Public Works fulfill the requirements of the
Money Bills Amendment Procedure and Related Matters Act (No. 9 of 2009). Amongst
other related matters, the Act provides a procedure along which to amend money bills
before Parliament and sets norms and standards for amending money bills.
This report outlines the progress made by the
Department of Public Works as reported in the different reports, including the
Strategic Plan, section 32 reports (emanating from the Public Finance
Management Act) and the 2011/12 Annual Report of the Department. It also
includes matters related to the Auditor-General’s opinion in the Department’s
2011/12 Annual Report.
1.1 The mandate and role of the Committee
The Portfolio Committee on Public
Works is guided by the Rules of Parliament and the Constitution to play an
oversight role over the Ministry as the executive authority of the Department,
the Department of Public Works itself and its entities. In doing so, the
Committee:
a) exercises its monitoring role so that it contributes
towards the improvement of the quality of life of all South Africans;
b) scrutinises legislation and other policies that impact
on the spheres of practice of the Department of Public Works;
c) facilitates interdepartmental and intergovernmental
relations at all spheres of government;
d) transforms the conduct of the Committee’s business to
be sensitive to provincial interests at the national level;
e) learns from international best practices that are relevant
to its field of jurisdiction to improve the overall service delivery to all
South Africans.
1.2
The mandate of the Department
The Department of Public Works is
allocated a functional mandate in terms of the Constitution of the
a) provide land and accommodation to national government departments
and institutions;
b) manage such land and accommodation;
c) act as the custodian of national government’s immovable
assets;
d) provide strategic leadership to the construction and property
industries;
e) co-ordinate the implementation of the Expanded Public Works
Programme;
f)
have the
Minister of Public Works, as its executive authority, carry out functions
related to land and accommodation through the State Land Disposal Act (No. 48
of 1961).
Four entities report to the
Minister of Public Works as the executive authority of the Department. These
entities are:
1) Agrèment South
2) Construction Industry Development Board (CIDB);
3) Council for the Built Environment (CBE);
4) Independent Development Trust (IDT).
2. Strategic Priorities and
Measurable Outcomes of the Department
2.1 Strategic
Priorities aligned to the Medium Term Strategic Framework
2.1.1 The strategic goals of the Department
comprised the following:
a)
To provide strategic leadership in
effective and efficient immovable asset management
and in the delivery of infrastructure programmes;
b)
To promote an enabling environment for the
creation of both short and sustainable work opportunities to contribute to the
national goal of job creation and poverty alleviation;
c)
To contribute to the building of a
developmental state and a comprehensive rural development framework through
state assets;
d)
To ensure transformation and regulation of
the construction and property industries to ensure economic growth and
development;
e)
To ensure effective corporate governance
and sound resource management; and
f)
To ensure improved service delivery in all
departmental programmes to meet clients’ expectations and leverage stakeholder
relations.
2.2
Measurable outcomes in the Department’s
strategic plan
The five outcomes from the Department’s strategic plan were
as follows:
a)
The creation of decent employment through
inclusive economic growth;
b)
The creation of efficient, competitive and
responsive infrastructure networks;
c)
An efficient and effective
development-oriented Public Service and an empowered, fair and inclusive citizenship;
d)
A skilled and capable workforce to support
an inclusive growth path; and
e)
Sustainable human settlements and an
improved quality of household life.
2.3
Minister’s performance agreement and
service delivery agreements
The Minister’s performance agreement and service delivery
agreement was central to the Department’s planning. These agreements covered
three sector outcomes as follows:
a)
Focus areas of Outcome 4: The Department
was required to reduce youth unemployment, analyse the cost structure of South
African economy and expand the Expanded Public Works Programme. The Department
of Public Works’ implementation/building programmes and input costs in the
construction sector should be enhanced.
b)
Focus area of Outcome 8: The Department was
required to contribute land for low-income housing to the Department of Human
Settlements.
c)
Focus area of Outcome 12: The Department
was expected to provide quality and accessible office accommodation that
facilitated service delivery for all citizens.
All branches in the Department used the
priorities and outcomes of the Medium Term Strategic Framework in their
business plans.
2.4 Key
medium-term priorities of the Department
The Department aimed to create a balance
between the change and sustainable
agenda by placing more emphasis on:
a)
Job creation and poverty eradication,
empowerment, skills development in the built environment and property
management, service delivery improvement to client departments, enhancement of
the asset register, cost effective infrastructure delivery and rural
development.
For the following three years of its strategy, the
Department would place emphasis on the following:
a)
Improved service delivery in the provision
of official accommodation for all national departments and all members of
Parliament;
b)
Promote intergovernmental co-operation to
improve service delivery (Schedule 4 provisions);
c)
Provide construction and property
management services to client departments at national level;
d)
Lead the Expanded Public Works Programme
(EPWP): the custodian of the largest state immovable asset footprint would
expedite the investment in infrastructure to promote social cohesion, local
economic development and job creation.
2.4.1 Immoveable asset register enhancement
a)
Amnesty Call campaign - properties recovered
to enhance the department’s disposal strategy and contribute to the Inner City Regeneration;
b)
Complete essential information for the Asset
Register to align it with generally recognised accounting practice;
c)
Use of the immovable asset footprint to
support government programmes.
2.4.2 Reclaiming
the mandate
a)
The Department should remain responsible
for the Repair and Maintenance Programme (RAMP) in the military basis of the
Department of Defence and Military Veterans.
b)
The Minister requested the Committee to
assist the Department in reclaiming the Department’s mandate of building for
client departments to enable client departments to focus on their specific and
dedicated mandates.
2.4.3 Skills
Development and
a)
The scarcity of skills in the construction
and built environment sectors required targeted, ongoing human capital
development initiatives by the Department.
b)
The Department was facing major challenges
around operational resources and obtaining strategic, professional and
technical skills in areas like project management, financial management and
business analysis.
c)
The department extended an invitation to
the broader public, calling for artisans and engineers to partner in the
interest of service delivery; a bursary programme was initiated to build a
skills base.
d)
Internship and learnership programmes were
in place for experiential training, and to assist qualified young professionals
in the employ of the Department to obtain professional registration.
2.4.4 Expanded Public Works Programme (EPWP) in
support of the New Growth Path
a)
Poverty alleviation would utilise the
existing budgets in the procurement of
goods and services,
using labour intensive methods to create jobs, deliver services and build
decent communities.
b)
Support provinces and municipalities to
invest in job creation in return for
cash incentives which can be (and must be)
re-invested in further job creation opportunities and improve its monitoring
and evaluation.
2.4.5 Contribution to rural development
a)
Recent roll-out of community, roads and
bridges construction and the
construction of
rural schools as fundamental children’s right to education, health and safety;
b)
Inner City Regeneration and contribution to
rural development and student
accommodation.
2.4.6 Building, maintenance and capital works
programmes
a)
Upgrading of facilities for disabled
people;
b)
Upgrading and construction of Department of Public Works’ offices;
c)
Development of national government
precincts;
d)
Redevelopment of infrastructure-related
border post centres; and
e)
Dolomite risk management.
2.4.7 Transformation and regulation of property
and construction industries
a) The
extension of the principles in the Government Immovable Asset Management Act
(GIAMA), 2007, to local government
b)
Review of White Papers; and
c) Implementation
of the Property Incubator Programme (PIP) and Construction Incubator Programme
(CIP).
3. Public
entities
Four public entities report to the
Department. These entities have identified, inter alia, the following key
strategic programmes for the MTEF period:
a)
The Construction Industry Development Board
(CIDB): training and contractor development, procurement reform and research
and development.
b)
The Council for the Built Environment
(CBE): compliance with policies, regulations and standards within the built
environment and building and monitoring skills development.
c)
Agrèment South
d)
The Independent Development Trust (IDT): to
prioritise poverty reduction and to deliver social infrastructure as an
implementing agent of government programmes.
4. Budget
Allocation
Budget Allocations Public Works[1]
|
Budget |
Nominal
|
Real |
Nominal
% change |
Real %
change |
||||
|
R
million |
2010/11 |
2011/12 |
2012/13 |
2013/14 |
2010/11-2011/12 |
2010/11-2011/12 |
||
|
Administration |
629.3 |
751.0 |
852.7 |
909.9 |
121.7 |
87.3 |
19,34 |
13,87 |
|
Immovable Asset
Management |
5 199.4 |
5 424.9 |
5 408.3 |
5 919.7 |
225.5 |
- 23.0 |
4,34 |
-0,44 |
|
Expanded Public
Works Programme |
1 479.1 |
1 575.2 |
1 729.4 |
1 996.6 |
96.1 |
24.0 |
6,50 |
1,62 |
|
Property and
Construction Industry Policy Regulations |
30.0 |
34.9 |
36.4 |
38.2 |
4.9 |
3.3 |
16,33 |
11,01 |
|
Auxiliary and
Associated Services |
26.9 |
33.2 |
34.3 |
35.7 |
6.3 |
4.8 |
23,42 |
17,77 |
|
|
|
|
|
|
|
|
|
|
|
TOTAL |
7 364.7 |
7 819.2 |
8 061.1 |
8 900.1 |
454.5 |
96.4 |
6,17 |
1,31 |
Source: National Treasury (2011) and
own calculations
Budget per Economic
Classification by the Department of Public Works
|
|
2011/12 R’000 |
2012/13 R’000 |
2013/14 R’000 |
TOTAL |
|
Compensation of employees |
1 242 062 |
1 241 158 |
1 305 054 |
3 788 274 |
|
Goods and services |
1 008 019 |
1 065 598 |
1 134 059 |
3 207 676 |
|
Interest on rent |
15 342 |
17 752 |
17 633 |
50 727 |
|
Transfers and subsidies |
4 010 265 |
4 164 530 |
4 611 536 |
12 786 331 |
|
Infrastructure |
1 443 945 |
1 474 742 |
1 724 653 |
4 643 340 |
|
Machinery and equipment |
99 623 |
97 442 |
107 146 |
304 211 |
|
TOTAL |
7 819 256 |
8 061 222 |
8 900 081 |
24 780 559 |
Transfers to Public Entities over the MTEF period[2]
|
Name of public
entity |
Main purpose of
public entity |
Transfers
from the departmental budget (R thousand) |
||||
|
|
|
2009/10
MTEF |
2010/11 MTEF |
2011/12
MTEF |
2012/13
MTEF |
2013/14
MTEF |
|
Agrément Board |
Provide assurance
through technical approvals of fitness for purpose of non-standardised
construction products. |
8 554 |
8 982 |
9 431 |
9 903 |
10 398 |
|
CBE |
Regulate built
environment profession. |
24 155 |
25 527 |
27 059 |
27 438 |
28 947 |
|
CIDB |
Develop
construction industry. |
59 269 |
63 665 |
65 959 |
66 882 |
70 561 |
|
IDT |
Provide
development management service to Government. |
0 |
0 |
150
000 |
0 |
0 |
|
Total |
|
91 978 |
98 174 |
252
449 |
104
223 |
109
906 |
(Source: 2011-2014 DPW Strategic Plan (2011))
The Department received a budget
allocation of R7.8 billion for 2011/12. This represented an increase of 6,2% in
nominal terms and 1,3% in real terms from the 2010/11 adjusted appropriation of
R7.4 billion. The Department’s budget represented approximately 1,5% of the
national appropriation by vote, excluding direct charges.
In terms of economic classification,
the departmental budget included transfers totalling 51,3% of the budget, with
a total monetary value of R4 billion. Of the R4 billion, R3 billion was in the form of conditional
grants to provinces and municipalities, while a total of R733.1 million was
allocated to departmental agencies and accounts. During 2011/12, the Department
would spend R1.4 billion on infrastructure-related projects. Moreover, current
payments amounted to 29% of the budget (R2.3 billion) and capital payments
amounted to 19,7% of the budget (R1.5 billion).
Compensation of employees remained practically unchanged
from R1.20 billion in the 2010/11 adjusted period to R 1.24 billion in 2011/12.
It has been noted in the past that the Department had experienced capacity
constraints in general, but most especially in relation to the technical
fields. The Department identified the following skills shortages in strategic,
professional and technical skills in the areas of project management, financial
management and business analysis.[3]
In 2008, the Department signed a bilateral agreement between
A broader effort to address the skills shortage in the
Department and the country, especially engineering skills, was outlined in the
strategic plan of the Department and the Engineering Council of South Africa
(ECSA). The Department had introduced learnerships and internships in some
professional councils such as the ECSA. In partnership with the Council for the
Built Environment, the Department initiated a bursary scheme for students, a
young professionals programme, and adult basic education and training. The ECSA
had launched a national initiative called ‘Engenius’ aimed at developing 30 000
engineers by 2014. The initiative aimed to develop engineers through
centralising national programmes, materials, products, initiatives and a
calendar of events for people with an interest in the field,[5]
The annual Sci-Bono Week, an initiative of the Gauteng Department of Education,
was aimed at creating awareness of the role of the engineering profession and
to facilitate interaction with learners and industry.[6]
Given that the Department had experienced a high vacancy
rate over the past few years, it was expected that these vacancies would be
filled in the new financial year. By March 2011, the Department’s vacancy rate
stood at 1 348 out of a total of 6 283 posts. Of these vacant positions, 641
were funded positions, while 707 positions were unfunded.[7]
At the beginning of March 2011, the Department had provided the Committee with
a plan to implement its recruitment drive. The plan included identifying funded
and unfunded positions, as well critical vacant positions that needed to be
filled; costing and confirming available funding for identified critical vacant
positions; advertising all critical positions, as well positions in all
Regional Offices and supply chain management
positions at head office. The Department expected to conclude the
selection and appointment stage by 31 May 2011.[8]
This was in line with the pronouncement made by the President in his 2011
state-of-the-nation address, namely that all vacancies in public services must
be filled within six months. The filling of vacant positions within the
Department required close monitoring. The Department noted that its high number
of vacancies had had a negative impact on the Department’s ability to fulfil
its mandate and strategic goals, as well as hampering its ability to
effectively meet client departments’ requirements.
4.1 Departmental
receipts
The Department generated revenue through its property
management entity by letting properties and official quarters and through the
sale of land and buildings. It was projected that the Department would collect
revenue to the value of R38.6 million for 2011/12. Of this amount, R33.9
million would be through the sale of goods and services produced by the
Department, R1.4 million from the sale of capital assets and R2.4 million
from financial transactions in assets and liabilities. The Department indicated
that sold buildings included redundant military bases and buildings that were
no longer cost-effective to maintain. It was uncertain how many redundant
military bases or buildings were sold and where these are situated. In
addition, there was no clear indication if the sale of these assets yielded a good
return for the Department.
4.2 Programme
analysis
The Department has five main
programmes, which included sub-programmes. The information provided below
consists of an expenditure analysis per departmental programme.
4.2.1 Programme 1:
Administration
Programme 1 provided strategic leadership and support
services, including the accommodation and overall management of the Department.
For 2011/12, the programme received an allocation of R751 million. This
constituted a nominal increase of R121.7 million from the previous year, which
proportionally represented 9,6% of the overall departmental budget. The
allocation for Programme 1 increased at a nominal rate of 19,3% and showed an
increase of 13,9% in real terms from the previous allocation. As indicated by
the 2011 Estimates of National Expenditure, the following savings and
cost-effective measures were identified under Programme 1 and included a
decrease in spending on communication, consultants and professional services,
advertising, and agency and support outsource services.
In terms of economic classification, the programme budget
included current payments to the value of R740.3 million (98,6% of the budget),
of which R170.9 million would be spent on compensation of employees. The
budget for the compensation of employees had decreased by 9,3% in real terms.
The Department had allocated R228.5 million to lease
payments and R187.7 million to property payments. Taking into account
allocations in the previous financial year, expenditure on lease payments had
increased in real terms by 18,3% while that on property payments had increased
by 23,4%. Further expenditure trends (in real terms) for 2011/12 included the
following:
a)
Contractors had declined by 20,5%.
b)
Agency and support/outsourced services had
increased by 69,1%.
c)
Machinery and equipment had declined by
54,2%.
d)
Software and other intangible assets had
increased by 1,2%.
4.2.2 Programme 2:
Immovable Asset Management
Programme 2 sought to provide and manage Government’s
immovable property portfolio in support of Government’s social, economic,
functional and political objectives. This programme was one of the main
programmes of the Department and proportionally represented 69,4% of the
overall departmental budget allocation for 2011/12. Its 2011/12 allocation
constituted R5.4 billion, which represented a nominal increase of 4,3% (and a
real decrease of 0,4%) from the 2010/11 financial year. Programme 2 performed
one of the core mandates of the Department and was where a significant proportion
of resources and effort were invested, which required tangible results.
Expenditure under this programme was dominated by the
following two sub-programmes:
a)
Property Management, which received the
highest allocation of R1.8 billion or 33,2% of the programme budget. This
constituted a nominal decrease of 3,3% (or a real decrease of 7,8%) from the
previous year.
b)
Infrastructure (Public Works), which
received the second highest allocation of R1.4 billion or 26,6% of the
programme budget. This amount represented a nominal increase of 4,9% or a real
increase of 0,1% from the previous year. Unlike the previous years, the
Infrastructure sub-programme (Public Works) did not receive the largest portion
of the budget under Programme 2.
Programme 2 was also responsible for the augmentation of the
Property Management Trading Entity. This entity was established in April 2006
as part of a longer-term reform programme to provide improved property
management services to client departments. With the establishment of the
Property Management Trading Entity, all accommodation-related costs were
devolved to client departments. In this regard, it has been issuing invoices
and collecting user charges from clients on a quarterly basis, based on amounts
that had been devolved to them. However, the Department reported that it had
been compelled to request additional funding from National Treasury to
accommodate the payment of arrears due to clients submitting invoices late.
During a presentation by the Department to the Standing
Committee on Appropriations, the Department reported that shortfalls had
occurred due to the municipalities improved administration. This meant that the
municipalities retrospectively billed and sometimes also charged interest on
properties that were not previously billed. While the exercise had increased
the revenue generated by municipalities, it did not take into account that the
national and provincial Departments of Public Works had limited funds available
to settle these invoices.[9]
Under current departmental agencies and accounts
(non-business entities), the following sub-programmes received a total of
R730.6 million, as follows:
a)
Property Management Trading Entity received
R630.2 million (a real decrease of 1,9% from the previous year).
b)
Parliamentary Villages Management Board
received R7.4 million (a real increase of 0,9% from the previous year).
c)
Construction Industry Development Board
received R66 million (a real decrease of 1,1%).
d)
Council for the Built Environment received
R27.1 million (a real increase of 1,4%).
The Parliamentary Villages Management Board (which provided
for the transportation and related costs of parliamentarians and related
officials) received a transfer of R7.4 million for 2011/12. This
represented a nominal increase of 5,7% and a real increase of 0,9%. This
sub-programme previously fell under Programme 5: Auxiliary and Associated
Services, but was shifted to Programme 2 in the 2010/11 financial year.
As noted above, the Department was responsible for four
entities that reported to the Minister of Public Works. Three of these entities
had received transfers from the Department under Programme 2. The Department,
however, only reported on funds allocated to two of these entities, namely the
Construction Industry Development Board which received R66.0 million
(representing a real decrease of 1,1% from the previous year) and the Council
for the Built Environment which was allocated R27.1 million (representing
an increase of 1,1% in real terms) for 2011/12. Between 2012/13 and 2013/14,
transfers were set to increase to R66.9 million and R70.6 million for the
Construction Industry Development Board and to R27.4 million and R28.9 million
for the Council for the Built Environment.
The Independent Development Trust, as a Schedule 2 public
entity, did not receive any funding from the Department as it was expected to
fulfil its mandate from the R2 billion grant it had received when it was
constituted in 1990. However, the IDT requested that it be recapitalised in the
2011/12 financial year due to the depletion of its capital base. It had,
therefore, received a once-off allocation of R150 million. Agrèment South
In terms of economic classification, transfers and subsidies
to the value of R2.7 billion included the Devolution of Property Rate
Funds Grant to Provinces (R1.8 billion), Departmental Agencies and
Accounts (R730.6 million), Public Corporations and Private Enterprises (R150
million) and Households (R3.3 million), as well as transfers to the trading
entity as discussed above. The conditional grant allocated to all Public Works
provincial departments was aimed at covering the cost of property rates charges
of all provincial government buildings. Funds had been allocated per province
based on the Department of Public Works’ calculations, which had been informed
by the property list from its register of properties.
The Infrastructure sub-programme funded the acquisition of
infrastructure for the Department, the prestige portfolio (which included
Parliament, the
The Infrastructure sub-programme (Public Works) had also
received funding to rehabilitate and upgrade existing buildings or construct
new buildings. For the 2011/12 financial year, a total of R1 443.9 billion had
been allocated (including the allocations for the above three border posts).
This was an increase of R67.9 million from the previous allocation for 2010/11.
The R1 443.9 billion was allocated for 2011/12, as follows:
a)
R115.2 million to upgrade and construct 45
departmental accommodation sites.
b)
R20.1 million to rehabilitate the Re
Kgabisa Tshwane (Government’s inner city renewal programme) and the
c)
R120 million to manage 50 dolomite risk
areas.
d)
R25 million to upgrade 110 facilities for
people with disabilities.
e)
R362.3 million to redevelop 136 border post
centres.
f)
R439.7 million to upgrade and construct 154
prestige accommodation sites.
g)
R119.9 million to develop 12 national
government precincts.
h)
R4.8 million to construct an office block
for the Department’s
i)
R108.7 million to refurbish Mahlamba Ndlovu
residential building under the prestige sub-programme.
The above infrastructure projects were aimed at enhancing
Government’s immovable property portfolio, as well as ensure safe and efficient
passage through the border posts. The development of a government precinct
would assist in reducing Government’s current large lease portfolio.
4.2.3 Programme 3:
Expanded Public Works Programme
Programme 3 sought to ensure the creation of work
opportunities and the provision of training for unskilled, marginalised and
unemployed people in
In terms of economic classification, compensation of
employees received R99.1 million. This amount represented an increase of
1,7% in real terms from the previous year. The increase was meant to enhance
the implementation of Phase II of the Expanded Public Works Programme and
provide technical support to departments, municipalities and the non-state
sector to ensure that labour-intensive methods and skills training were being
utilised in their programmes.
Goods and services received a total of R172.5 million,
excluding lease payments and interest and rent on land, which translated into a
real decrease of 14,8%. Of this total for 2011/12, contractors received R6.3
million and the agency and support/outsourced services received R83.1 million.
The bulk of the expenditure under this programme was
allocated to transfers and subsidies amounting to R1.3 billion, which represented
a nominal increase of 9,3% and a real increase of 4,3%. An amount of R1.1
billion or 88,1% of the transfer was allocated to provinces and municipalities
as follows:
a)
R267.3 million for the incentive grant to
provinces;
b)
R200.4 million towards the social sector
incentive grant to provinces; and
c)
R679.6 million towards the incentive grant
for municipalities.
An amount of R154.4 million or 11,9% was allocated to
non-profit institutions.
Expenditure on the programme was expected to increase over
the MTEF period and would reach R2 billion by 2013/14, mainly due to additional
allocations to fund the performance-based incentives of the Expanded Public
Works Programme. However, the uptake of the performance-based incentives had
been slow. The Department reported in March 2011 that some provinces and
municipalities had difficulty in accessing the incentive grants due to poor
reporting or in some instances non-reporting of projects. In an effort to
increase reporting, the Department employed 90 data capturers to assist with
compliance in this regard.[13]
A report by the Department on the disbursement of incentive grants to provinces
and municipalities indicated that the Buffalo City Municipality in the Eastern
Cape, for example, did not access any of the R1.4 million grant allocation for
Quarters 1 to 3.[14]
A number of objectives were outlined, including increasing
the Departments’ participation in the implementation of the Expanded Public
Works Programme by:
a)
Training 6 000 youth in the artisan trades
of the built environment by 2014;
b)
Ensuring that 15% of the youth trained
through the National Youth Service programme were annually placed in employment
opportunities;
c)
Ensuring that at least 200 municipalities
would report on the implementation of the Expanded Public Works Programme by
March 2014;
d)
Increasing the number of participating
organisations in the non-state sector (from 58 in 2009/10 to 140 by March 2013)
by increasing funding to R57 million in 2012/13 to R66 million in 2013/14.[15]
In addition, the Department intended to provide support to
public bodies in the different sectors to ensure that they reached the set
targets in terms of work opportunities and full-time equivalents by 2014. The
table below provides an outline of the set targets in the different sectors and
the number of work opportunities and full-time equivalents.
|
Sector |
Number of work opportunities |
Full-time equivalents |
|
Infrastructure |
2 374
000 |
903
478 |
|
Environment |
1 156
000 |
325
652 |
|
Social |
750
000 |
513
043 |
|
Non-State |
640
000 |
278
261 |
The above targets set by the Department should be closely
monitored, especially the target as it related to youth as this aspect and the
creation of decent work were emphasised in the 2011 state-of-the-nation address[16].
4.2.4 Programme 4:
Property and Construction Industry Policy Regulations
Programme 4 promoted the growth and transformation of the
construction and property industries, as well as uniformity and best practice
in construction and immovable asset management in the public sector. This
programme consisted of two sub-programmes, namely Construction Industry
Development and Property Industry Development, that fell under Programme 3 in
2009/10. Programme 4’s budget had increased from R30 million in 2010/11 to
R34.9 million in 2011/12, which constitutes a nominal increase of 16,3% and a
real increase of 11%.
The economic classification of the Property and Construction
Industry Policy Regulations programme consisted of current payments and
payments for capital assets, but no transfers and subsidies. Compensation for
employees was allocated R12 million or 34, 5% for 2011/12, which constituted a
nominal increase of 12,15% and a real increase of 7%. The two programmes had a
staff complement of six and eight personnel respectively. Goods and Services
received R22.7 million or 65,4%, which represented a nominal increase of 18,9%
and a real increase of 13,4%. The Goods and Services budget included R8.6
million or a 37,9% budget for agency and support/outsourced services, which
constituted a real increase of 12,4%.
The Construction Industry Development Programme received
R23.2 million or 66,5% of the programme budget. This amount constituted a real
increase of 12,4%. The Property Industry Development Programme received R11.7
million or 33,5% of the programme budget. This represented an increase of 7,4%
in real terms.
The Department intended to revise existing policy and draft
the following pieces of legislation:
a)
Reviewing the 1997 and 1999 White Papers - respectively
called “Public Works Towards the 21st Century” and “Creating an
Enabling Environment for Reconstruction, Growth and Development in the
Construction Industry”. The reviews over the MTEF were aimed at informing
policy development in the construction and property industries.
b)
Drafting the Expropriation Bill to align it
with the Constitution by providing a common framework to guide procedures for
the expropriation of property by all organs of state. The Expropriation Act
would be promulgated in the 2011/12 financial year.
c)
Establish Agrèment South Africa as a
juristic person by introducing in Parliament, the draft Agrèment South Africa
Bill in the 2011/12 financial year and would be promulgated in 2012/13, with
the establishment of Agrèment South Africa in 2013/14.
d)
A review of the Built Environment Professions
Bill would be completed and presented to the Minister in 2011/12 with the
monitoring and evaluation of the report set for the financial years of respectively
2012/13 and 2013/14.[17]
e)
Develop guidelines on immovable assets
related to planning, acquisition, management, maintenance and disposal for
national and provincial users and custodians by 2011/12. In 2012/13 and
2013/14, compliance with these guidelines would be monitored.[18]
f)
In 2011/12, a regulatory framework would be
developed to assist the Department of Cooperative Governance and Traditional
Affairs with the extension of the principles of the Government Immovable Asset
Management Act (No. 19 of 2007) to the local government sphere. By 2012/13, the
legislation would be tabled in Parliament and the extension approved by
2013/14.
The above two pieces of legislation, namely the
Expropriation Bill and the Agrèment South Africa Bill, had been mentioned in
the Department’s 2009/10 programme, but had not been presented to Parliament at
the time. It was unclear how the Department intended to meet its set target for
the 2011/12 financial year, especially when the Department had reported to the
Committee in March 2011 that the process of drafting legislation was time
consuming. In addition, the public participation process required in the
revision and drafting of legislation was not a simple process and also required
time. The revision of policies related to the property and construction
industries should be monitored over the MTEF period.
4.2.5 Programme 5:
Auxiliary and Associated Services
Programme 5 sought to fund various services, including
compensation for losses on the government-assisted housing scheme, assistance
to organisations for the preservation of national memorials, and meeting
protocol responsibilities for State functions. The budget for Programme 5
increased from R26.9 million in 2010/11 to R33.2 million in 2011/12, which
represented a nominal increase of 23,4% and a real increase of 17,8% from the
previous year. The bulk of the budget was allocated to transfers and subsidies,
which amounted to R21 million and accounted for 63,3% of the budget. The
remaining 36,7% went towards current payments in the form of goods and
services. The transfer budget included an allocation of R2.5 million or 11,8%
to departmental agencies and accounted and R18.5 million or 88,2% to foreign
governments and international organisations.
This Programme did not have a capital budget and did not
provide for compensation of employees, as the major portion of the expenditure
was in the form of transfer payments to departmental agencies, foreign
governments and international organisations as noted above. Transfer payments
would be disbursed in the following manner:
a)
R18.5 million to the Commonwealth War
Graves Commission and to the United Nations for the maintenance of national
memorials. This amount represented a real increase of 0,9%.
b)
R10.1 million towards State functions,
which provided for the acquisition of logistical facilities for such functions.
The amount represented a real increase of 89%.
c)
R2.5 million to the sector education and
training authorities aimed at influencing training and skills development
throughout the construction industry. This amount constituted an increase of
3,7% in real terms.
d)
R2.1 million for compensation for losses,
which provides compensation for losses in the State housing guarantee scheme
when public servants failed to fulfil their obligations. The amount represented
an increase of 5,5% in real terms.
The budget allocation to the Department attempted to give
effect to the priorities set out in the 2011 state-of-the-nation address.
Central to these priorities was the increased participation in Phase II of the
Expanded Public Works Programme, with an emphasis of providing skills and creating
job opportunities for communities, especially the youth, as one of the measures
to alleviate poverty. The effective implementation of the programme, especially
in terms of timeous reporting, was crucial to access the incentive grant, which
allowed for the creation of more work opportunities at provincial and municipal
levels.
The Department had reported on efforts to address its high
vacancy rate by May 2011 as a measure to ensure effective and efficient service
delivery. This had been a challenge for the Department over a number of years,
in particular the struggle to gain and retain the required technically skilled
staff. In addition, the Department had prioritised large infrastructure
programmes over the MTEF period.
5. Analysis
of Public Finance Management Act[19]
Section 32 Expenditure Reports
5.1 Total
expenditure trend: Summary
As at the end of the fourth quarter, the Department
of Public Works (DPW) had spent a total of R7.061 billion or 90.91 per cent of
the adjusted appropriation budget of R7.830 billion for 2011/12. Thus, total
under spending recorded for 2011/12 amounted to R768.3 million or 9.1 per cent,
which is 1.1 per cent less than what the under spending was at the end of
2010/11. Between 2008/09 and 2011/12, the department recorded an average underspending of 6.7 per cent. However, the
last two financial years, that is, 2010/11 and 2011/12, have seen a significant
increase in the magnitude of the department’s underspending, from 5.97 per cent
in 2009/10 to 10.2 per cent and 9.1 per cent in 2010/11 and 2011/12
respectively. This is reflective of the deteriorating capacity of the
department to fully spend its budget.
5.2
Programme spending trends
(Source: 4th Quarter Expenditure Report 2011/12
financial year, National Treasury)
Programme
1: Administration: As at the end of the fourth
quarter, total spending recorded for the Administration
programme amounted to R837.1 million against the adjusted appropriation budget
of R777.5 million which thereby reflects an overspending of 7.7 per cent.
However, after taking into account virements to the programme amounting to
R41.6 million, the total over spending recorded for 2011/12 is 2.2 per cent.
The overspending in programme 1 was mainly due to adjustments relating to
improved conditions of service for departmental staff (including senior
management staff) which were not adequately budgeted for as well as staff
appointments made outside the available budget. The department appointed staff
in the property management trading entity, compliance movable assets and
quotations units in response to the Auditor-General’s findings on the shortage
of skills within the department in these areas and these appointments were not
provided for in the department’s compensation of employees’ budget for 2011/12.
This contributed to the unauthorised expenditure of R18 million incurred under
this programme for 2011/12.
Programme
2: Immovable Asset Management: Total expenditure under the
Immovable Asset Management programme
as at the end of the fourth quarter amounted to R5.002 billion or 92.44 per
cent of the adjusted appropriation budget of R5.411 billion thereby reflecting
an under spending of 7.6 per cent. However, after taking into account virements
of R16 million to the programme, the total under spending for 2011/12 under
this programme increased to 7.8 per cent. The under spending in programme 2 was
mainly due to slow movement in expenditure for infrastructure wherein only 70
per cent of the allocated infrastructure budget of R1.444 billion for 2011/12
was spent. The main reason advanced by the department for the slow expenditure
in infrastructure is the lack of appropriate capacity within the department to
plan for and implement projects and also because of the decision taken by the
Minister during the 2011/12 financial year to centralise the department’s
entire decision making on the awarding of contracts. The department was further
allocated R70 million in 2011/12 for the implementation of the energy
efficiency project, which commenced in 2008/09 and was scheduled for completion
on 31 March 2012. However, since its introduction, the project has been
characterised by poor spending. Of the R70 million allocated in 2011/12, only
R55 million had been spent at financial year-end.
Programme
3: Expanded Public Works Programme: Total
expenditure recorded for the expanded public works programme (EPWP) for 2011/12
amounted to R1.163 billion or 73.8 per cent of the adjusted appropriation
budget of R1.575 billion. This reflects an under spending of 26.2 per cent
under this programme. However, after taking into account virements away from
the programme to other programmes amounting to R54.7 million, the total under
spending for 2011/12 under programme 3 was reduced to 23.5 per cent. As in the previous 2
financial years, the main contributing factor to the underspending in this
programme is fewer than anticipated payments of infrastructure incentives to
provinces and municipalities. In 2011/12, there was an improvement in the
performance of provinces in the infrastructure sector which also manifested in
improved performance of the EPWP incentive grant for provinces whereby 88.4 per
cent of the allocated R267.3 million had been transferred to provinces at
year-end. In 2010/11, only 55.1 per cent of the allocated funding was transferred
to provinces. While there was a slight improvement in payments to
municipalities in 2011/12, spending against the EPWP incentive grant for
municipalities remains low. For 2011/12, the grant was allocated R679.6 million
and of the allocated funding, only 54.6 per cent had been transferred to
municipalities as at the end of March 2012. Similarly in 2010/11, only 44.9 per
cent of the allocated funding was transferred to municipalities.
The main reasons advanced by the department for poor spending in infrastructure
incentive grants are:
a)
failure by some provinces and municipalities to meet quarterly
performance targets conditional for them to receive the incentive
b)
lack of performance reporting by provinces and municipalities
c)
failure by provinces and municipalities to design programmes that are
labour intensive. In an
attempt to address the problems articulated above, as from 1 April 2012, the
infrastructure incentive grants for municipalities and provinces have been
revised from schedule 8 grants to schedule 5 and 6 grants, enabling an upfront
flow of some of the funds to provinces and municipalities and will possibly
improve the total grant spending in 2012/13 and going forward.
Programme
4: Property and Construction Industry Policy Regulations: As
at the end of quarter 4, programme 4 recorded a total spending of R34.4 million
or 98.6 per cent of the adjusted appropriation budget of R34.9 million thereby
reflecting an under spending of 1.4 per cent. However, after taking into
account virements of R348 000 away from this programme to other
programmes, total unspent funds for 2011/12 amount to R188 000 or 0.5 per cent.
Programme
5: Auxiliary and Associated Services: The Auxiliary and Associated Services
programme recorded expenditure of R25.2 million against the adjusted
appropriation budget of R31.6 million as at the end of the fourth quarter.
Thus, total under spending for 2011/12 amounts to R3.9 million or 13.3 per
cent, this after taking into account a virement of R2.5 million away from the
programme to other programmes. The under spending recorded for programme 5 was
mainly due to savings realised in transfers to the Commonwealth War Graves
Commission.
5.3
Economic classification
(Source: 4th Quarter Expenditure Report 2011/12
financial year, National Treasury)
As at the end of the fourth
quarter, the department recorded significant under spending in the appropriated
budgets for transfers and subsidies as well as payments for capital assets
amounting to 8.8 per cent and 28.1 per cent respectively. However, while
spending for current payments was in line with projections, it should be noted
that the department incurred unauthorised expenditure of R18 million in current
payments under the Administration
programme, mainly due to over spending in compensation of employees due to
appointments made outside the available budget as well as overspending in goods and
services, specifically in property payments and computer systems. The under
spending in transfers and subsidies was mainly due to the non-payment of
infrastructure grant incentives to provinces and municipalities who failed to
meet the minimum requirements conditional for them to receive the incentive
grant while the under spending in payments for capital assets was due to the
delayed implementation and non-completion of the department’s infrastructure
projects.
5.4 Other
relevant spending issues
Spending and
performance on earmarked and specifically and exclusively appropriated items
(including projects):
Table 2:
Spending on Earmarked Funding
|
Earmarked
Item |
Total Earmarked (R’000) |
Expenditure as at the end of Q4 (R’000) |
% Spent Against Total Appropriation |
|
Infrastructure
(Public Works, including BCOCC) |
1 443 945 |
1 011 408 |
70% |
|
Construction
Industry Development Board (cidb) |
65 959 |
65 959 |
100% |
|
Council for the
Built Environment (CBE) |
27 059 |
28 659 |
105.9% |
|
Independent Development Trust
(IDT) |
150 000 |
150 000 |
100% |
|
Parliamentary Villages Board |
7 401 |
7 401 |
100% |
|
Augmentation of the Property Management Trading Entity |
630 189 |
630 189 |
100% |
|
Energy efficiency in government
buildings |
70 000 |
55 058 |
78.65% |
|
Non-State sector (EPWP) |
152 826 |
152 826 |
100% |
|
Independent Development Trust (EPWP) |
9 180 |
9 180 |
100% |
|
Provision for the Payment of Bank Charges (EPWP – non state sector) |
1 544 |
1 544 |
100% |
|
EPWP incentive grant to local government for the Infrastructure Sector |
679 583 |
370 873 |
54.57% |
|
EPWP incentive grant to provinces for the Infrastructure Sector |
267 269 |
236 181 |
88.37% |
|
Devolution of Property Rate Funds Grant to provinces |
1 803 230 |
1 803 230 |
100% |
|
Expanded Public Works Programme incentive grant to provinces for the
Social Sector |
200 358 |
200 358 |
100% |
(Source: 4th Quarter Expenditure Report 2011/12
financial year, National Treasury)
All expenditure on
specifically and exclusively appropriated funds, including earmarked funding,
was in line with projections with the exception of (i) slow movement in
expenditure for infrastructure (Public Works, including BCOCC) due to the
delayed implementation of projects (ii) expenditure for the Council for the
Built Environment (CBE) slightly exceeded the funds earmarked at the beginning
of the year due to an additional allocation of R1.6 million received from the
DPW during the Adjusted Estimates of National Expenditure process (iii) the
under spending in funding allocated for the energy efficiency project in government buildings was due to the
delayed processing of invoices at year-end (iv) the under spending in EPWP
incentive grants to provinces and municipalities was due to the non-payment of
incentives to public bodies who failed to meet performance targets conditional
for them to receive the incentive.
5.5
Virements
The table below indicates a
summary of virements between programmes as at the end of the 2011/12 financial
year:
(Source: 4th Quarter Expenditure Report 2011/12
financial year, National Treasury)
A discussion on the impact
of the virements above on the department’s overall spending is included as part
of the analysis of expenditure outcomes per programme for the period under
review under section 2 above. Included in the virements above is a virement of
R15.2 million from the department’s payments for capital assets budget to goods
and services which was approved by the National Treasury as follows:
a) R5
million to cover the transformation expenses incurred in 2011/12;
b) R1
million to offset the expenditure resulting from the movement of departmental
staff between Pretoria and Limpopo following Cabinet’s decision to place the
provincial Department of Public Works under administration;
c) R1.2
million to cover costs incidental to the dismissal of the former executive
authority of Public Works’ staff in line with the Basic Conditions of
Employment Act;
d) R8
million to cover expenditure relating to the fleet service contract, previously
classified as a finance lease under machinery and equipment, which will now be
reported for under goods and services as an operating lease. According to the
department, the relevant carry through effects of this transaction have been
provided for in the department’s 2012 Medium Term Expenditure Framework budget.
·
6. Analysis of the
Department’s Annual Report and Financial Statements
The Department of Public Works and the Property Management
Trading Entity (PMTE) received a Disclaimer of Opinion with Matters for the
period under review. The Department and the Property Management Trading Entity
(PMTE) received a similar opinion in 2010/11. This section will only provide a
select list of issues highlighted by the Auditor-General.
6.1 Report by the
Auditor-General on the performance of the Department
The Department received a Disclaimer of Opinion due to:
6.1.1 Immovable Tangible
Capital Assets
The National Department of Public Works, as custodian of all
Government immovable assets is required to undertake the vesting of immovable
assets of un-surveyed or surveyed unregistered State land and all other
immovable assets vested prior to 1994. This includes all land registered in the
name of:[20]
a)
The National Government of the Republic of
South Africa.
b)
Any of the historical holders of State land
before the advent of the democratic dispensation in 1994.
c)
All land vested with national Government
and situated in the former TBVC[21]
states and Self Governing Territories.
d)
All former South African Development Trust
land vested in the Department via proclamation.
e)
All properties acquitted by the Department
for the discharge of its mandate.
The completeness, existence, rights, valuation and
allocation of properties recorded in the Immovable Asset Register of R4.1
billion (2011: R3.5 billion) could not be verified.[22]
6.1.2 Irregular Expenditure
The Auditor-General was unable to:[23]
a)
Determine if R27.6 million was awarded in
line with Supply Chain Management prescripts and if the resultant payments were
regular or not.
b)
Obtain sufficient audit evidence of the
completeness of irregular expenditure amounting to R171 million (2011: R1.3
million). The Department did not have adequate systems for identifying and
recognising irregular expenditure.
6.1.3 Fruitless and Wasteful Expenditure
The Department did not have adequate systems for identifying
and recognising fruitless and wasteful expenditure and the Auditor-General
could therefore not obtain appropriate audit evidence of the completeness of
the R69.2 million.[24]
6.1.4 Operating Leases
a)
Insufficient, appropriate audit evidence
available for operating lease expenditure with an estimated value of R48.5
million.
b)
Unable to verify the occurrence, accuracy
and completeness, cut off and classification of operating leases stated at
R189.5 million.[25]
6.1.5 Receivable for
Departmental Revenue
a)
Unable to verify the completeness for
receivables for departmental revenue of R15.7 million. There are no adequate
systems in place to maintain records of all properties rented out by the
Department.[26]
6.1.6 Lease Commitments:
Operating Lease Revenue
a)
The Department could not provide actual
lease agreements in all instances (after compiling supporting schedules for
lease commitments: operating lease revenue from the Property Management
Information System (PMIS)), to the value of R6.5 million (2011: R7.6 million).
b)
Lease agreements provided for audit testing
revealed an estimated understatement of operating lease revenue commitments of
R20.7 million (2011: 17.8 million).
c)
The complete and accurate lease revenue
commitments of R83.9 million (2011: R112.4 million) could not be verified in
the absence of a complete and accurate Immovable Asset Register.[27]
6.1.7 Commitments
a)
Insufficient appropriate audit evidence to
substantiate contract price adjustment provisions (CPAP) amounting to R128.6
million.
b)
Unable to verify the completeness,
valuation and allocation of commitments of R2.0 billion.
6.1.8 Related Party
Transactions
The Department disclosed indirect costs incurred on behalf
of the PMTE of payments for R105.2 million (2011: R80.9 million) and employee
costs of R105 million (2011: R86 million).[28]
The Auditor-General also made note of the following additional
matters:[29]
a)
Proper control systems to safeguard and
maintain assets were not implemented.
b)
Achievement of planned targets not attained
in all instances. No proper systems were considered during the planning
process, particularly how to address the under-spending in Programmes 2 and
3.
c)
Transfers that were not originally budgeted
for were made without National Treasury approval.
d)
Revenue management; procurement and
contract management; strategic planning and internal controls.
e)
Investigations being conducted of the
alleged abuse of urgent and emergency procurement and the utilisation of sole
suppliers.
f)
Investigations to determine collusion
between officials and service providers or any reckless spending of funds.
6.2
Report
by the Auditor-General on the Performance of the Property Management Trading
Entity (PMTE)
The PMTE received a Disclaimer of Opinion, with an Emphasis
of Matter. Following below is a select list of issues. The Auditor-General
highlighted a number of instances where the PMTE did not have proper systems in
place with which to undertake a verification of the audit evidence:[30]
a)
Irregular expenditure of R1.3 billion
(2011: 430 million).
b)
Fruitless and wasteful expenditure of R239
million (2011: R6.8 million).
c)
Insufficient evidence for trade and other
receivables balance of R3.9 billion (2011: R3.7 billion; 2010: 3.0 billion).
d)
Trade and other receivables are understated
by an estimated R224 million.
e)
Prepayment values disclosed are based on an
estimate of prepaid operating lease expenditure and therefore R310.7 million
(2011: R272.7 million and 2010: 202.6 million) could not be verified by the
Auditor-General.
f)
The PMTE does not have an appropriate
information or compensating manual system in place to ensure the complete
recording of accruals stated as R291.9 million. This resulted in an
understatement of R503 million. No evidence was available to support accruals with
an estimated value of R61.7 million.
g)
Insufficient, appropriate audit evidence
available to support transactions amounting to R57.5 million in lease rentals
on the operating lease.
h)
A total of R3.7 billion lease rentals on
operating lease in the statement of comprehensive income could not be verified.[31]
i)
The probable inflow of future economic
benefits in respect of claims by the entity was not assessed and therefore the
contingent assets stated at R77.2 million (2011: 65.9 million) could not be
verified.
j)
Invitations for competitive bidding were
not always advertised in at least the Government Tender Bulletin as required by
Treasury Regulation 16A6.3(c).
k)
The PMTE’s main bank account was overdrawn
throughout the reporting period.
l)
Contracts and quotations were awarded to
bidders based on points given for criteria that differed from those stipulated
in the original invitation for bidding and quotations.
m)
Leadership did not implement effective
human resource management to ensure that adequate and sufficiently skilled
resources were in place and that performance was monitored.[32]
The PMTE also lists Contingent Liabilities and Assets. A
list of claims made against the Entity is outlined including:
a)
Atlantic Air Conditioning CC claimed R12
million for services rendered.
b)
Kwinda Construction CC instituted 3 claims
for services rendered amounting to R408 678.
c)
Appolis Builders claimed R9.6 million for
damages.[33]
d)
M Manong and Associates instituted a claim
for breach of contract amounting to R1.9 million.
The PMTE, in turn, instituted claims
against service providers including:[34]
a)
R28.6 million - Davis & Hinch for
Breach of Contract.
b)
R1.1 million – TG Bosch-Badenhorst for
rental overpayment.
c)
R1.6 million – Meenawathi Ethwar
overpayment of fraudulent claim.
d)
R11.1 million – M Manong and Associates –
Breach of Contract.
e)
R89 518 - KE & Sons Investment – Unjust
enrichment.
7. Committee
Observations
7.1 The Committee notes with concern the delays
in the reintroduction of the Expropriation Bill and the Built Environment
Professions Bill which were withdrawn from Parliament in the 2008/09 financial
year due to the need for further consultation. These bills would have been
reintroduced in Parliament during the 2009/10 financial year. The Department
has subsequently indicated that the bills were to be reintroduced in the
2010/11 and 2011/12 financial years, this did not occur as the Bills still were
not introduced to Parliament upon the consideration of this report by the
Committee.
7.2 During its oversight visits the Committee
observed the challenges in the implementation of the Government Immovable Asset
Management Act (No. 19 of 2007), especially as it did not extend to the local
government level.
7.3 The Committee has noted the management
challenges that face the Department of Public Works and noted with concern the
lack of stable leadership in the Department.
7.4 The Committee notes with concern the
progressively worsening audit outcomes received by the Department over the past
three financial years, leading to a second disclaimer in the financial year
under review.
7.5 The Committee is concerned about the
capacity of the Internal Audit Unit of the Department of Public Works.
7.6 The Committee notes with concern the
lack of proper systems in the Department of Public Works for the management of
leases entered into by the Department on behalf of client departments.
7.7 The lack of technical skills is a
challenge for the Department of Public Works and the Department needs to
address the matter urgently.
8. Conclusions
8.1 The Department still has challenges in
terms of its capacity, specialist skills, and filling of vacancies with
appropriately skilled personnel.
8.2 The Department needs to put in place
systems to ensure the effectiveness of the Immovable Asset Register, as well as
systems that will ensure the financial integrity of the Department and the Property
Management Trading Entity (PMTE). The Auditor-General made note of several
instances where no proper systems were in place which made the management and
monitoring of the Department and the PMTE a challenge.
8.3 The Committee welcomes the new EPWP
model and would encourage the Department to enforce the appointment of people
with disabilities and women in the EPWP projects.
9.
Recommendations
The Committee recommends to the Minister of Public Works that:
9.1 A permanent Director-General should be appointed
to assist with the turnaround strategy of the Minister.
9.2 Systems for the management of rentals
and leases entered into by the Department of Public Works on behalf of client
departments should be put in place by the end of the 2012/13 financial year.
9.3 The Department of Public Works should
put financial controls and systems in place to improve its financial systems by
the end of the 2012/13 financial year.
9.4 The national, provincial and
municipality asset registers should be aligned by the year 2014. The asset
register consisting of international assets should also be completed by 2014
with the help of the Department of International Relations and Cooperation.
9.5 Tender specifications on all EPWP
projects should include the appointment of women contractors and people with
disabilities. The Department of Public Works should closely monitor that
contractors comply with the EPWP guidelines e.g. training should be provided on
all EPWP projects.
9.6 The Department of Public Works should
ensure that there are policies in place for state funerals and other state
functions.
9.7 The Department should also ensure that a
policy on prestige projects is in place that regulates the maximum cost and
types of furniture provided in the offices and homes of the Ministers and
Deputy Ministers.
9.8 A policy should also outline the minimum
requirements of the furniture provided in the houses that accommodate ordinary
members of Parliament.
9.9 The Department of Public Works should
have a policy on the disposal of assets that are no longer required. The
policies should be finalised by the end of the 2012/13 financial year.
9.10 The Department of Public Works should
minimise the outsourcing of maintenance and do most of the maintenance
in-house.
9.11 One of the immediate corrective measures is
the resuscitation of the government workshops.
Workshops should be re-opened nationally and in all the provincial Departments
of Public Works. The skills provided in the workshops should reduce outsourcing
in the Department and artisans would be provided through the workshops. The Department should also address the bigger
challenge of attracting the technical skills that the Department needs e.g. the
recruitment of engineers, architects, quantity surveyors and other technical
and specialised skills.
9.12 The maintenance of Public Works buildings
should be done by the EPWP beneficiaries and the National Youth Service project
participants in the different regional Departments of Public Works. This
programme should be aligned with programmes offered by other departments e.g.
programmes offered by the Department of Rural Development and Land Reform on the
training of youth to carry out maintenance projects.
9.13 The Expropriation Bill, the Built
Environment Professions Bill and Agrément South Africa Bill should be tabled in
Parliament by the end of the 2012/13 financial year.
9.14 The Government Immovable Asset Management
Act should be extended to local government level by 2014.
9.15 The disciplinary cases that are still
pending in the Department should be finalised without any further delays.
Report to be
considered.
References
Department of Public Works. (2010) Department of Public Works Strategic Plan for 2010 to 2013.
Department
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