Independent Development Trust Annual Report 2005/06
Public Works and Infrastructure
25 October 2006
Meeting Summary
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Meeting report
PUBLIC
WORKS PORTFOLIO COMMITTEE
25 Ocotober 2006
INDEPENDENT DEVELOPMENT TRUST ANNUAL REPORT 2005/06
Chairperson: Mr F Bhengu (ANC)
Documents handed out
Independent Development Trust (IDT) 2005/06 Annual Report (www.idt.org.za)
IDT presentation: Part1
& Part2
SUMMARY
The Independent Development Trust gave a briefing on its 2005/06 Annual
Report. The IDT had received an unqualified report for the fourth year running.
Certain matters that the Auditor General had emphasised
were being attended to. A hacker had managed to fraudulently transfer R9,7 million from the IDT bank account
and this was being investigated.
Members asked about construction companies using women only as a front in order
to get contracts from the IDT. Members felt that not enough emphasis was put on
the needs of youth. youth. Members were concerned
about the millions of rands which were transferred
from the IDT's accounts while the offices were
closed. They also asked questions about the monitoring of projects.
MINUTES
Ms Thembi Nwedamutswu
Chief Executive Officer, Independent Development Trust (IDT) gave members a
briefing on IDT's 2005/06 Annual Report. The briefing
covered the following topics: Compliance Report; Overview of its Changing
Mandate; Poverty Debate Issues, Approach to Development; Its Business Model;
Its 2006/08 Strategy; Its Budget Concerns and Decisions; Review of the 2005/06
Expenditure; Review of Strategic Objectives and Targets. The role of the IDT in
the development sector had changed. She discussed IDT's
view on poverty and the need for it as a development agency to bridge the gap
between those support institutions with resources - donors, government and the
private sector - and the target population that needed those resources.
Its 2006/08 strategy aimed to sharpen its products and services, deliver
measurable sustainable development outcomes (rather than outcomes) and boost
the quality of its analysis of indigenous development. Its four strategic
objectives were to add value to the national development agenda through comprehensive
programme management services, establish and maintain
strategic partnerships to enhance development outcomes, to enhance the delivery
and absorptive capacity of development institutions and to gear all of the
resources of the organisation towards excellence in
delivery. She noted that the IDT had received an unqualified report from the
Auditor General for the fourth year running. Certain areas, such as
reconciliation of programme accounts, needed
improvement and were receiving attention.
The Chairperson wanted to know if Project Consolidate did not address the lack
of capacity.
The CEO replied that the Department of Provincial and Local Government (DPLG)
has said that Project Consolidate had been rolled out,
however the Department of Public Service and Administration did not have the
capacity to implement it. For this reason, IDT was in discussions with DPLG.
Prof Edith De Vries, Group Executive, Business
Development Unit of IDT told members that R4 million worth of transactions had
been done on one day. The IDT is aware that there are risks involved when
handling that amount of money. The Auditor General had raised some concerns
about the financial statements, but did not qualify their report. The concerns
raised by the Auditor General were being attended to. The IDT did not encounter
any material losses as a result of criminal conduct during the year. However
there was a fraudulent transfer of R9.7 million, which took place on the 24
December 2005. It was established that the transfer did not take place from the
IDT's premises but was done remotely. The South
African Police, the Scorpions and First National Bank's fraud investigation
unit was investigating the matter. An insurance excess of R250 000 needs to be
paid to recover the money. A previous service provider had lodged a claim
against the IDT, however the IDT had a counter claim of R1,4
million as the service provider owed money to the IDT.
The CEO requested that they meet again to present IDT's
First Quarter of 2006/07 results and 2007/09 Corporate Plan. Prof De Vries added that presenting the corporate plan earlier in
the year would assist the Committee in having an idea as to what to expect when
the annual report is presented.
The Chairperson agreed
that it would help the Committee, especially when the annual
report is being presented to the Committee.
Discussion
Mr J Blanche (DA) asked if the IDT had come
across any companies that were using women as a "front".
The CEO replied that there has been an instance where fronting was discovered.
The contractor had subsequently been blacklisted. This is one of the reasons
why there is a partnership with South African Women in Construction
Ms N Ngcengwane (ANC) wanted to know how closely the
IDT worked with the Construction Industry Development Programme
(CIDP) and what the success rate was of the IDT programmes
in communities. She also asked if the IDT works with other departments and how
projects that are implemented are monitored.
Mr S Bhebhe, Acting Chief
Operations Officer of IDT, replied that each project is monitored from the time
it starts through to its completion. From time to time the project is monitored
to see if they are on track. Each project is under the management of a cluster
manager who sends reports in on a monthly basis. Once a building has been
completed, the IDT needed to assess how the building is being utilised.
The CEO replied that they have a very good working relationship with the
CIDP.
Mr S Opperman (DA) asked
how far the IDT is with reaching its objective of halving poverty by 2014. Also
was there any progress with the investigation into the fraudulent transfer?
Mr T Moir, Acting Chief
Financial Officer for IDT replied that the R9.7million fraud was committed
outside of the IDT. Someone had copied the IDT system and accessed the FNB
account. The money was then moved to 12 different accounts. A comprehensive
investigation then followed. No proof was found that a computer on the IDT
premises had been used. The police had told the IDT that this was not an
isolated case, other businesses have also been
targeted. All indications are that there is a syndicate behind the fraudulent
transaction. The South African Police have followed all leads, but none of the
leads pointed to the transfer been an inside job. At this point it was
difficult to say when the case will be finalised.
The CEO commented that only R1.1 million was withdrawn from one of the 12
accounts. The accounts where the money was moved to have been
frozen and the IDT is in the process of recovering the money.
Mr N Magubane (ANC) wanted
to know what would cause the IDT to have a rollover.
Mr S Bhebhe replied that
some projects are run over a period of three to five years. The IDT would
receive the money for the project in one lump sum. This money would not be seen
as a roll over for that financial year. If money has been allocated to be spent
in that year and it is not, that would be a rollover.
The CEO commented that the implementation of a project is slow.
The Chairperson left the meeting and Mr L Maduma (ANC) took over as Acting Chairperson.
Mr Maduma asked if a
database of companies who had been found to be fronting, had been created.
Mr Bhebhe replied that it
was difficult to find out if a contract was using women only as a front.
However in cases where they have blacklisted a contractor, there had been a
clear indication that the contractor was fronting. It was difficult to find out
if contractors were fronting especially if they were not registered. Should a
contractor not be registered they will be referred to the CIDP.
Prof De Vries commented that they are in the process
of reworking their agreement with South African Women in Construction (SAWIC).
Mr Maduma said that IDT had
focussed their interaction on SAWIC, however children
and youth also needed to be focused on.
Prof De Vries replied that one could not come up with
a plan to eradicate all poverty alone. As an organization, the IDT could not do
everything.
Mr Maduma replied that the
Committee was not saying that the IDT's interaction
with SAWIC is wrong, however that is not the only sector affected by poverty.
Prof De Vries replied that they have decided to focus
on women as the Umsobomvu Fund focused on the youth.
The Acting Chairperson wanted to know what has been done in communities to help
alleviate poverty and not what has been to empower women.
Mr Bhebhe replied that they
do have programmes aimed at alleviating poverty,
which focused on youth and women.
The Chairperson commented that it is a concern that the IDT is building
schools. He felt that the Acting Director General for Public Works should look
into this.
Mr J Blanche (DA) commented that if money was
allocated for a project, it should be put into a trust fund, so that there
would be no rollover in the financial statements.
The Acting Director General for Public Works, Mr Z Ntsaluba, commented that National Treasury would monitor
all infrastructure projects, however this would only
be implemented in 2007/08.
The Chairperson commented that the R9.7 million that was transferred from the
IDT account was a great concern to members. Surely only the person
who had developed the system, would have known how to hack into it.
The meeting was adjourned.
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