COGTA on Community Work Programme (including reasons for not submitting forensic reports and other documentation requested by the Committee); with Deputy Minister

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Cooperative Governance and Traditional Affairs

29 June 2021
Chairperson: Ms F Muthambi (ANC)
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Meeting Summary

The Committee convened virtually to be briefed by the Department of Cooperative Governance and Traditional Affairs (CoGTA) on Community Work Programme (CWP) and the Agrarian Revolution Programme (ARP).

On the Community Work Programme, the Department reported that following allegations of corruption and fraud in the programme, the Department instituted investigations and the Special Investigative Unit (SIU) was tasked with leading the investigations. Following the conclusion of the investigations, 14 criminal cases of fraud were opened and handed over the Commercial Crimes Unit for further processing.

On the Agrarian Revolution Programme (ARP), the Department reported that in the past three financial years, the programme has been allocated R324 million to fund its 36 projects across seven provinces (Eastern Cape, KwaZulu-Natal, Limpopo, Mpumalanga, North West, Free State and the Western Cape). Several non-profit organisations have exceeded their budgets but have not completed the projects. As a result, the Department will have to provide them with additional funds, in order for them to complete the projects.

For the second time, the Committee rejected the report presented by officials, mainly because the Department had still not submitted information that it was requested to submit by 29 April 2021. This sitting was a follow up to several other sittings the Committee has had with the Department, with the most recent one occurring on 22 April 2021. During the course of that meeting, the Committee also rejected the Department’s presentation, as it felt that officials had provided unsatisfactory responses to the questions posed.

In the previous sitting, the Committee requested that the Department submit the following information: the five forensic investigations by legal and accounting firms into the programme; a list of all the agrarian projects in the country, their Rand value and where they are located; a report containing the names of all beneficiaries and whether the Department has had a return on its investment; and all the information relating to which non-profit organisations had not been submitting invoices as required by the service level agreements signed from 2019-2021.

The Committee was disappointed that the Department had provided a document that it had presented in a meeting on 27 November 2020. Members also found that some of the information contained in the document was misleading, as in the one instance it was indicated that a project took place in a municipality that had since been amalgamated into another. Another example was that in its presentation the Department indicated that there are 36 active projects funded by the Department, across seven provinces, whereas in a list provided to the Committee it was indicated that there was 40 active projects in four provinces.

As the Department has not complied with the Committee’s request to submit the forensic reports, it was faced with no other option but to lodge action (in line with the Powers, Privileges and Immunities of Parliament and Provincial Legislature Acts) against the Department. Members felt that the Department’s non-compliance was a deliberate effort to prevent the Committee from doing its work.

Officials from the Department apologised for the standard of the document presented during the meeting and assured the Committee that the next presentation would be of the standard expected by Members. Additionally, at the next sitting, the Department will ensure that all the information requested by the Committee is submitted and present in the presentation document.

Meeting report

The Chairperson opened the virtual meeting, welcoming the Members, Committee support staff, as well as the delegates from the Department of Cooperative Governance and Traditional Affairs (CoGTA), led by its Deputy Minister.

The Chairperson said that the meeting was a follow-up from the previous engagements with the Department on the Community Work Programme (CWP). In their last meeting on 22 April 2021, the Committee had rejected the Department’s presentation because the responses provided were unsatisfactory. During that meeting, the Committee requested that the Department submit, by 29 April 2021, the five forensic investigations by legal and accounting firms into the programme; a list of all the agrarian projects in the country, their Rand value and where they are located; a report containing the names of all beneficiaries and whether the Department has had a return on its investment; and all the information relating to which non-profit organisations (NPOs) had not been submitting invoices, as required by the service level agreements (SLA) signed from 2019-2021. In addition, the Department was asked to quantify the Rand value of the unaccounted-for invoices. As this information has not reached the Committee, the Department was expected to explain (during this meeting) why it did not submit the information as requested.

The Committee requested that the Department submit the forensic reports because this programme has been responsible for the major qualified audit reports that the Department has received from the Auditor-General (AG). To date, the Committee has not received the reports.

To uncover the wrongdoing in the CWP, the Department commissioned an investigation. The Committee has requested for the Department to quantify the costs for this investigation and the action plans to implement the report’s recommendations. One of the forensic reports recommended that criminal charges should be laid against officials who have been found to be involved in wrongdoing. She asked for the Department to provide a progress report on this matter and that it include the case numbers.

The Committee received a list of only 40 active projects in various municipalities in four provinces: the Eastern Cape (EC), KwaZulu-Natal (KZN), Mpumalanga and the North West (NW). However, the presentation indicated that there are only 36 active projects funded by the Department, across seven provinces. She asked that the Department clarify this information. It remains to be seen whether the projects have shown a return on the money spent.

The Committee was disappointed that the Department had provided a document, which it had presented in a meeting on 27 November 2020. As the Department has not complied with the Committee, it has no other option but to lodge action (in line with the powers, privileges and immunities of Parliament and Provincial Legislature Acts) against the Department. This non-compliance is a deliberate effort to prevent the Committee from doing its work.

Deputy Minister’s Remarks

The Deputy Minister (DM) of CoGTA, Mr Obed Bapela, said that it was true that the Committee has requested updates on the CWP, mainly regarding the information it had not received. Following the meeting on 22 April 2021, the Department conducted a review on the information provided and found that with the exception of the forensic reports, most of the information had in fact been submitted. The forensic reports had not been submitted because some of them have not been finalised, and if they were submitted, it would compromise the accused officials. A letter was sent by the Director-General (DG), which included a table of contents and a spreadsheet of all the information the Committee requested.  

During the two briefings, the Department will explain why only four provinces had been listed as having agrarian projects, instead of seven. The Department has made progress in addressing the deficiencies and concerns raised in the AG’s forensic reports, and it was confident that the material irregularities from 01 April 2018 to 31 March 2021 will be addressed. It is currently working with the AG to address one material irregularity, from 01 April 2014 to 31 March 2018, and this will be explained in the presentation.

In April 2021, the Department initiated an audit into the expenditure of the Agrarian Revolution Programme (ARP) and its assets; site visits to confirm the expenditure figures claimed by the various NPOs are currently underway. This process will be concluded before the expiry of the contracts in September 2021.

Director-General’s Remarks

The Director-General (DG) of CoGTA, Ms Avril Williamson, thanked the Committee for the opportunity to present the report. She said that the Department has, to the best of its best ability and knowledge, tried to respond to all the queries raised by the Committee. All information has been submitted, except the document on all the forensic investigations. However, information on the cost and length of each investigation undertaken will be referred to during the presentation. The report was not submitted as planned, due to the perceived impact it would have on the ongoing disciplinary cases. All other reports requested by the Committee can be provided.

The Committee Chairperson requested that in its presentation, the Department should not recycle information; it should rather answer all questions raised by Members.

Briefing on the CWP

The Chief Director of CWP Implementation at the CoGTA, Mr Pankie Matomela, briefed the Committee on the CWP. He began by indicating that due to the financial misconduct in the programme, the Department instituted three forensic investigations, which would verify the completeness of the asset register, review the processing of payments, and establish whether there had been an irregular appointments and awarding of tenders (amongst other things). Among their findings, the accounting and legal firms established that there had been irregularities in the awarding and appointments of tenders. Also, they found that the programme did not have strict controls for the processing of payments, hence it recorded R39 714 864 in overpayments to various NPOs. The reports contained several recommendations to address the issues, one of which was that the CWP should exercise stricter control on the verification and validation of PM fee claims.

Following allegations of corruption and fraud in the programme, the Department instituted investigations and the Special Investigative Unit (SIU) was tasked with leading the investigations. Following the conclusion of the investigations, 14 criminal cases of fraud were opened and handed over the Commercial Crimes Unit for further processing.

Briefing on the ARP

The ARP Director at CoGTA, Mr Litha Twaku, briefed the Committee on the ARP. He began by indicating that the ARP was implemented from 2018/19 as part of the CWP. In the past three financial years, the programme has been allocated R324 million to fund its 36 projects across seven provinces (EC, KZN, Limpopo, Mpumalanga, NW, Free State and the Western Cape).

Several NPOs have exceeded their budgets but have not completed the projects. As a result, the Department will have to provide them with additional funds, in order to complete the projects. In addition, the Department is currently in the process of verifying all items procured to begin the projects and what is still required to complete those that are not completed. It will also be verifying the ARP assets for all of the projects and the list of beneficiaries submitted by the NPOs.

The Chairperson opened the floor for discussion.

Discussion

The Chairperson asked why the Department did not note on its slides the over-expenditure recorded on some of the projects. She further commented that had the Department taken its work seriously, it would have put in measures to deal with such instances.

Mr Twaku said that the Department was currently looking at the amounts that have been paid to NPOs and Non-Governmental Organisations (NGOs), to determine where there had been over-expenditure.

Mr K Ceza (EFF) mentioned that the poor-quality presentation illustrated that the Department did not take the work of Parliament seriously. Budgets had been exceeded in certain instances, yet the projects had not been concluded, which sends the message to taxpayers that their money is not being spent correctly. He suggested that the Department prepare adequately before it presents to the Committee.  

The Chairperson was frustrated that the Department had recorded over-expenditure, yet those projects had not been completed.

She asked for a mover on Mr Ceza’s proposal.

Mr H Mkhaliphi (EFF) seconded the proposal.

As the head of the Department, the DG should explain why the Committee had been taken for granted. In the previous meeting the Committee requested that the Department’s officials correct their presentation, but once more they had presented a poor-quality document. Not much progress had been made in resolving the issues in the programme.

Mr C Brink (DA) asked for clarity on Mr Ceza’s proposal.

The Chairperson clarified that Mr Ceza proposed that the Department prepare a full and comprehensive report on the ARP before sitting with the Committee.

Mr Brink agreed with the proposal and requested that the DG provide an acknowledgement that the Department understands what the Committee expects at the next meeting.  

The Chairperson indicated that the Committee would still engage on the first report presented.

Ms D Direko (ANC) said it was worrisome to see the standard of the Department’s documents. She asked how long the Department would continue to submit such documents. That both the Deputy-Director General (DDG) and the DG allowed for the document to be presented illustrated the lack of leadership at the Department. At some stage, one of them must account to the Committee, to explain how such a poor report was submitted. Department officials cannot do as they please. She suggested that the Committee consider taking strong action against the Department.

She supported Mr Ceza’s proposal.

Mr G Mpumza (ANC) said that he was mostly covered by other Members. He only added that the Department should process the report, so that it is of a standard that is acceptable to the Committee. The report should be succinct and accurate, so that Members are able to engage on it.

The Chairperson agreed with Ms Direko’s proposal.

Mr Ceza said that Members had not been briefed on any of the details regarding the programme. The presentation was incomplete and should not have been presented to the Committee.

He asked what consequence management had been taken against officials accused of wrongdoing.  

Ms Mkhaliphi indicated that the Committee should not allow for the Department to take it for granted.  

A participant of the CWP in the Western Cape requested assistance on an issue they had faced with officials in the Department. The matter was referred to the DDG, but it still not been addressed. This gave the impression that the Department did not care about its participants. The Committee would provide the names of the officials who had failed to address the participants’ issue. Action must be taken by the Committee against the Department for its incompetence.

The Chairperson said that the Committee was concerned by the report. It had been the sixth or seventh time the Committee has had to attend to this matter.

The accuracy of the information presented is misleading, as in the one instance it was indicated that a project took place in a municipality, which had since been amalgamated into another. In another instance, an official indicated that the Department was dealing with the agrarian assets and to this day, the Department cannot mention what the assets were and what their value is. Additionally, there is a discrepancy in the details of where each of the projects are. The Department has alleged that the projects are occurring in certain areas. However, people in those communities are not aware of the projects.

Department officials are yet to provide the Committee with the list of the NPOs currently involved in the projects, their invoices and the overspending that has been recorded in each project. Also, they have not provided the names of board members, Chief Executive Officer’s (CEO) and former CoGTA officials who are now involved with these NPOs (as some of the former officials have been working with current officials to gain advantage in each project). The Committee required all of this information so that it can conduct its oversight work.

No response has been provided on the model that the Department will use for the programme. Previously, the Committee was informed that the model has been prepared and had since been referred to Cabinet. She asked whether this was true.

About R16 million has been spent in preparing the investigative report so far, but the Department does not want to share this document with Members. By doing this, the Department was undermining the Committee, as it should have access to forensic reports. Due to the Department’s disregard of its requests, the Committee would have to take further action against it. Its first action would be to investigate the DG’s statement that the forensic reports had been referred to the relevant authorities.  She asked why the Department had not indicated what the outcome of the meeting between it, the South African Police Services (SAPS) and the South African Revenue Service (SARS) was.

The Committee requested that the Department, on the following day, provide it with a report that would include the names of the officials who had since been suspended for wrongdoing, their case numbers, and the police station where they were charged. If the Department did not want to take action against these officials, the Committee will, as it is empowered to do so. The Department should take the Committee more seriously.

She asked whether the top officials in the Department understood how to approach the financial and governance matters related to the CWP. If so, why had the Department provided raw and unprocessed information? All the slides presented contained recycled information.

Responses

Acting DDG of the CWP Programme, Mr Pieter Pretorius, said that the comments made by the Committee were correct. For the past six months, management has been unable to attain a consolidated report on the state of the agrarian reports. There are several cases where NPOs have spent their budgets, but only 50% of the work has been completed. Thus, additional funds need to be provided. Management was concerned by this, and this is why two months ago it decided to change the structure and responsibilities of people in the CWP branch, as there was no single person responsible for agrarian matters (it was added as a co-responsibility of some officials). Now, however, there are two officials who are dedicated to agrarian matters, and their task is to do a detailed audit that includes a desktop exercise, after which they must visit the sites. This will be combined with the asset verification process. Presently, these officials are compiling a dossier for the ARP, and the process is ongoing; it will ensure that they are able to hold the NPOs to account.

All the information presented is the only information that the Department currently has. The issues plaguing the programme have frustrated Department officials.  

Referring to the suspense account, he said that the Department has been able to bring down the amount of money paid to NPOs, which has not been accounted for from R287 million, to R61 million. The Department has been dealing with the issues surrounding the programme and it had not lied to the Committee.  

A list off the board members and CEOs of each NPO has been provided to the Committee. The Department will establish which of these individuals are former employees of CoGTA. There is a cooperative, which will assist in establishing the beneficiaries.

The previous model has been scrapped. In establishing a new model, the Department has identified two areas that need improvement: first, the operational and administrative issues; second, the training of participants. These two issues are matters that have been considered deeply by the Minister. There has been progress in the administrative and operational matters. The Department is also partnering with other government departments to create work packages for participants, as it has found that a significant number of them have remained perpetually in the programme. This proposal is being finalised and the Department hopes that it will be submitted to the Minister within the next two months. He clarified that the plan has not been submitted to Cabinet as mentioned previously by other officials.

Referring to the complaint laid by the participant, he said that the Department had seen the complaint and had since requested and received a report on the issue, from the NPO in question, which it will forward to the Committee. The Department tries within its means to address the concerns of all participants, but the programme has a small unit that must service 250 000 participants.

He apologised for the report presented in the meeting. Officials will ensure that it attains all the relevant reports from the NPOs, so that they can account for their financial expenditure. They will also ensure that community leaders and traditional authorities agree with the state of each ongoing project. Once the Lockdown restrictions are lifted, officials will visit all of the sites and then compile a dossier.  

DM Bapela said that the concerns raised by Members should not be ignored and are valid. He proposed that the Committee allow for the department to correct its reports and provide accurate information, which would explain all the issues in the CWP and ARP. Additionally, a report indicating which officials had been suspended, when they had been suspended and whether criminal charges had been laid should be provided to the Committee. The Committee is entitled to the Department’s information, so long as it is not classified.

Once projects have been approved, officials should inform traditional leaders where the projects would take place, when they would commence and which NPO or NGO had been appointed. In previous instances, the Department did not appoint the NPOs referred by the traditional leaders.

The Department would look into whether there has been value for money on the projects. It would also provide the Committee with clarification on its model once it has been finalised.

He would personally work with both the DG and the DDG on the preparation of the next presentation to the Committee.

Department officials should engage with CoGTA provincial officials, as they are responsible for monitoring the progress of the projects. As the Lockdown restrictions have further restricted movement, Department officials cannot conduct oversight on the various projects to verify the information provided by NPOs. He requested that the Department be given until the third week of August to finalise its reports.

Follow-up discussion

The Chairperson requested that the Department provide a list that includes the names of the officials who had since suspended, why they had been suspended and when had they been suspended.

During an oversight visit, Members were informed by Department officials that the model had been revised, which was contrary to the information provided during the meeting.

Each project has a project manager who must conduct oversight on his/her project. With this in mind, it was inexcusable that the Department had not provided the Committee with information on the various projects. The Committee only required the Department provide it with a spreadsheet of the NPOs that had not been complying. There must be value for money spent on each of the projects.

The Committee would permit for the officials to consolidate its information and refine the report, as this report was an insult to the Members.

Members were asked whether they agreed with the timeframe provided by the Department.

DM Bapela requested that the Department be provided the minutes for previous meetings, so that the Department understood what Members required to be on the report. This would also assist the Department with responding to all issues adequately.

The Chairperson mentioned that certain officials had troubled the Committee, with some of them sleeping during meetings. The Committee would make an exception and provide the Department the minutes of previous interactions. It did not need to do so for other departments, as they usually understood what the Committee expects of them.

Ms Mkhaliphi said that postponing the meeting until August would not be wise, as the Department had already been provided enough time. She recommended that the Committee decide on an earlier date for the Department to return.

Referring to the complaint, she said that a particular NGO was responsible for undermining the participant. This NGO represents projects in various provinces, yet it undermines its participants. She was pleased that the Department would provide feedback on the action taken against the junior officials in the department.

The Chairperson reckoned that if the programme was utilised correctly, it would provide great assistance and strategic input to the country.

She proposed that at the Thursday meeting, the Committee discuss its own administrative matters, instead of sitting with the Department. This would allow for the Department to compile all the necessary documents. The Committee would then schedule a meeting for the end of July, during the Constituency Period, as it is an urgent matter.

Mr Brink said that the Department should take note that since the Committee was elected, nothing had been said about the policy objectives that need to be satisfied by review of the model. For instance, should it be a policy objective that one set of beneficiary’s benefits year after year, or should it be the case that they are rotated? No model should have administrative issues.

The Chairperson said that the review process of the model must be finalised soon.

She said that the Committee would meet on Thursday to deliberate on its programme for the third term and other issues. Members would also await feedback from the House of Traditional Leaders on the Department’s presentation.

She thanked all officials for their input.

The meeting was adjourned.

 

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