Department of Public Works Quarter 2 2013 Report, with Deputy Minister in attendance

Meeting report

Department of Public Works (DPW) Quarter 2 2013/14 Report
Mr Mziwonke Dlabantu, Director-General, DPW, presented the performance information, consisting of highlights and achievements, challenges, and some of its corrective measures.

Programme 1 – Administration Highlights/Achievements
• Strategic Management: It developed the DPW 2014/15 Annual Performance Plan (APP)  - A guiding document that shapes the strategic plans, operational and risk champions trained to safeguard the Department’s exposure to risk elements.
• Inter-Governmental Relations: Increased participation in governance structures (EXCO, Accountability EXCO, Audit and Risk Management Committee where decisions are taken and implementation plans are scrutinised for progress).
• Monitoring and Evaluation: Assistance provided to Provincial Departments of Public Works in developing performance indicators as part of the Department’s roles and responsibilities on the concurrent mandate. Some of these are discussed at the forum for Ministers and Members of Executive Councils (MINMEC).
• Finance and Supply Chain Management: Developed a SCM Policy for better procurement, one of the key challenges facing the Department.
• Corporate Services: The Department held successful wellness workshops with all regional offices and 9 other government departments. These consist of emotional, substance abuse, debt management, awareness and education, physical wellness.
• The Department also produced a progress report on the international human rights instrument on the mainstreaming of Gender/ Disability and Youth through recruitment, procurement, constitution of committee and job creation in all DPW programmes

Programme 2 – Immovable Asset Management Highlights/Achievements
• Regional Coordination: Management of property debtors in terms of signed contract terms and conditions, relevant legislation/regulations and policy was achieved. A total of 1516 property debtors were managed against the target of 1453.
• Prestige Management: Completed Prestige Policy that spells all the standards and norms in their operations to fulfil its mandate.
• Key Accounts Management: Full participation of other government departments in DPW’s workshops on User Asset Management Plans (U-AMPs). U-AMPs are tactical plans for managing an organisation's infrastructure and other assets to deliver an agreed standard of service (Departments of Rural Development and Land Reform (DRDLR) and Home Affairs (DHA).
• Inner City Regeneration: Department’s critical role in the development of precinct development plans within the city of Tshwane.

Programme 3 – Expanded Public Works Programme (EPWP) Highlights/Achievements
• EPWP plays a critical role in promoting the creation of short and sustainable work opportunities which contribute to the national goal of job creation and poverty alleviation, and has provided technical support to Municipalities in planning and implementing labour-intensive projects.
• In the second quarter significant progress was made by municipalities in reporting their progress to DPW enabling it to reflect on a definite figure about the performance of EPWP. Also, a large number of work opportunities were created with substantial improvements in EPWP participation among designated groups.

Programme 4 – Property & Construction Industry Policy Regulations
This programme ensures transformation and regulation of the Construction and Property industries to ensure economic growth and development. It is a dependent programme and largely a process or chain-event driven in nature. It often experiences challenges such as delays in stakeholder feedback on particular policy and political considerations. Its function has a huge impact in the built environment. DPW reported consultations with key stakeholders and inputs had been consolidated and draft guidelines developed.

Programme 5 – Auxiliary Associated Services
Infrastructure support provided to 4 planned & 6 unplanned prestige events.

Areas of Focus (Key Challenges)
• Capacity constraints in determining the required resources to feed into the HR Plan.
• SCM processes - Delays experienced through the procurement processes.
• IT constraints - Lack of integrated systems affecting data integrity, delays and security issues.
• Budget constraints to promote performance based budgeting which is the practice of developing budgets based on the relationship between program funding levels and expected results from that program.

The Department takes into consideration the recommendations made by the oversight bodies such as the Portfolio Committee on Public Works, Parliament of South Africa; Auditor-General; and the Audit and Risk Management Committee. The contributions by these bodies include ensuring that programmes/projects are effectively monitored towards achieving their goals and internal controls tightened to curb misconduct that may hamper service delivery. Throughout the financial year, while taking these contributions into account, the Department continued to find ways of improving in areas of concern and effectively contribute to service delivery

Financial Information
Mr Cox Mokgoro, Chief Financial Officer, DPW presented a detailed financial performance report (see documents) which consisted of the financial figures for DPW and for the Property Management Trading Entity (PMTE). Allocation of funds had improved in the past year, moving to a lower usage of the funds.

Expenditure: Total spent as at 30 September 2013 (43%) and 2012 (52%):
• Programme 1 – 35% (31/09?13), 34% (30/09/12)
• Programme 2 – 42%, 56%
• Programme 3 – 49%, 51%
• Programme 4 – 50%, 41%
• Programme 5 – 59%, 68%

Discussion
The Chairperson sought further explanation for the spending to acquire Ocean View Terrace (on page 54)

Mr Mokgoro responded that they were projected to under-spend the capital budget by R200 million. They decided to reprioritise and spend the money elsewhere. Acquisition of this building in East London was thus done and housed numerous government entities.

Mr Dlabantu said this purchase had been in the pipeline for some time and that they had begun to reduce the rental portfolio. Most buildings used by government are not owned by government. He emphasised the need for reducing the dependency on paying for building via leasing not ownership.

The Chairperson pointed out that there were neglected Public Works buildings that  were not maintained and questioned whether new buildings would have any different treatment. DPW also had unused rental buildings on its portfolio while they were building new buildings.

Ms C Madlopha (ANC) asked for clarification on page 8 which gave reasons by the department for each “target not achieved”. One such was low staff morale. The Committee had been told previously that their was staff buy-in for the turnaround strategy. See noted the comments on the audit targets saying that DPW stated it was using outdated audit methodology. The comment that “there was no chairperson” for the Risk Management Committee was not acceptable to the Committee - one could appoint an acting chair. The Chair interrupted and pointed out that there had been no chair since January 2013. On page 16 reference was made to regional managers not handing in business plans. What about the improved monitoring that DPW claimed? Where was the follow-up? She referred to page 35 about non-achievement of staff vetting – why was this delayed. The promise to achieve asset register compliance had been broken. What are the reasons for this. What was the plan going forward to correct these deficiencies?

Ms N Madlala (ANC) asked what was to be done about the SCM challenges which have been present for some time. She asked if money spent on department meetings, media, President’s Breakfast. Which was financed by DPW and which by the President’s Office – there was confusion. She asked how many internships did DPW offer and were they in all the provinces. She wanted to know when DPW was going to finalise the five-year-old project in Tshwane.

The Chairperson referred to the targets and asked the DG to define and differentiate between the meaning of “target partially achieved” and “not achieved”. She wanted clarification on vetting on page 35. It was a two-fold process by DPW and the National Intelligence Agency (NIA). Last year DPW reported that NIA was overloaded and could not vet DPW. Today DPW was reporting the achievement of 200 security clearances of prioritised personnel issued by DPW Head Office. Was the NIA involved, if not, they would continue with the problem of leaking of documents. Referring to page 43 she wanted a response about accessibility. On page 45 the report did not have a regional response about “C-AMP Documents, Approved DPW CWIP & PMIP, and Approved Rehabilitation programmes for identified state owned buildings”. She asked what was being done about the regions that are not reporting. SCM was still a challenge – what was DPW doing about it. On page 46, she wanted clarification about the incubator programme and SCM problem. On the exchange program with Namibia. About the property in Namibia, was it owned by Namibia or South Africa? Was it already sold? The target showed “not achieved”.

Ms N Ngcengwane (ANC) pointed out that there was no follow up and no agreement in place with certain countries regarding property deals.

The Chairperson asked how close they were to reaching their target.

The question about the asset register was raised again – how far were we with this target in the various towns? That target was March 2014.

A Member pointed out that there was an issue with the number of consultants being used. And could not one of them have been used as the Risk and Management Committee chair. She wanted an update on the target non-achievement of the IE work on page 34. She asked for clarity on the target for improved disability accessibility in all the buildings.

Mr J van der Linde (DA) began is question with a statement about unemployment and asking, cynically, who is being employed. The Chairperson responded by asking, “Are you bringing politics into this meeting?”

Mr van der Linde then proceeded to ask for clarification on all the columns stating “target not achieved”. He had an additional question about the auditing and asked why certain people are employed “to just sit around”. 

The Chairperson wanted clarification about who was paying for the consultants. Were they on the department’s payroll or elsewhere? She pointed out that parliamentary village maintenance was lacking. There were complaints in the villages about the lack of furniture and housing. She asked about the “ambiguous” NGOs that are being funded by DPW. What exactly are they doing – one NGO is being funded for displaying dolls?

Ms Madlopha asked about the planned and unplanned (that is, the unpredictable and unexpected) maintenance of old buildings. She asked if there was a policy for uniformity in both maintenance of old buildings and for new building design and maintenance.

Ms Ngcengwane inquired about the status of the workshops revival, as they would generate job creation and possibly provide skilled labour for proper maintenance workers.

A Member commented that DPW had to get local governments to account for the maintenance of old buildings.

Ms Madala asked why R2 million was being requested by DPW, why there is a R1 billion deficit, and why accommodation charges only paid 50%.

The DG responded that in the criteria for measuring achievement, there was a need to highlight the areas which have problems and need to be resolved as there were areas of inadequacy. In response to the audits, he spoke of low morale due to the changing of the criteria of the audits - that the solution is to encourage a good work ethic. In response to the faulty documents, he said that he was sorry for not being more vigilant.

The Chairperson asked why their documents contradicted themselves.

The DG said that it was a mistake. He could not believe it himself but that he has proof of the correct version.

The Chairperson said she had read a statement in September which was the first meeting - that was the correct one.

The DG said that statement says there was no meeting; there have been workshops.

The Chairperson said that anyone can write anything down due to the lack of monitoring. She said “we are giving faulty documents to PMG.”

The DG stated that planning and coordination are problems and they affect the templates. There was a need to redo the infrastructure management system. Accessibility projects were at various stages of implementation. He addressed the question about regional submissions by saying there were new plans in place that will be finalised in 2014 which will combat this problem. This plan will be systematized for the next five years for consistency.

Mr Mokgoro explained the five areas. Not Achieved had two levels. Level I consists of no progress or information available and achievement of 0 – 10% outputs. Level II consists of processes not started but having outputs. Partially Achieved consists of 50 – 89% outputs being achieved. Achieved consists of +90% of target achieved. Blue indicates: Not having provided info (which differs from Not Achieved Level I).

The Chairperson expressed her concern for the lack of explanation in both the meeting and the documents provided by the Chief of Monitoring and Evaluation.

Ms Madlopha asked what the impact of those vetted and not vetted by audits had on this report.

A DPW official responded that there was collaboration between DPW and the State Security Agency (SSA).

The DG continued and said that vetting consisted of filling the form out, obtaining a three month bank statement, give the SSA complete report and bank statement, checking with their family, and questioning them. The DG said this questioning was like a “lie detector” calibre questioning without actually using a lie detector.

The Chairperson brought up the email that had circulated the past year within the DPW without security knowing and stopping it. She was worried about false vetting and that vetting that is unsystematised, especially given the lack of security manifested by last year’s email circulation.

The DPW official responded that even with the highest security there cannot be any promises; not everything can be stopped. But security clearance is being treated much more seriously.

The DG said that he had met with the DDG about the demand for space in Tshwane. There are documents that describe the supply chain. They needed to coordinate with Treasury to find out how to finance these projects. The match between demand and supply required more than five years in order to have the optimal outcome with these projects.

Deputy Minister Jeremy Cronin said the Tshwane issues were unilaterally driven and that these issues were being worked out at regional levels as well as at local level. He used Cape Town as an example of this.

The Chairperson asked if the DPW could rewrite the memorandum which dictated how these issues are to be combated.

Deputy Minster Cronin replied that because these projects take time to implement and because there is the objective of uniformity and systemisation, the memorandum from 2006 was still in effect.

The DG addressed the prior question on vetting, saying that replacing those who vetted is difficult because training takes time and it is difficult to get people to do the job correctly. He reassured the Committee that a general monitoring policy is being addressed through policy change and that it will continue to improve.

Mr Mokgoro said that because of Supply Chain practices there were problems with the contractor incubator program. Policy needs to be changed so that it does not go through Treasury. He said SCMs are not meeting their demands and need significant reforms. The DPW has been chosen by Treasury to test procurement specific to the DPW. These procurements would be monitored on a daily basis. There was an issue with Parliament appointing consultants so it was appointed by Treasury. He said a workshop would happen within the next two weeks which would address what policies should be implemented and be beneficial.

A Member asked if the finance questions would be addressed.

The Chairperson responded that the responses would be answered in writing via email.

Deputy Minister Cronin said he was impressed by the exchange and the critical eye of the MPs towards issues. He pointed out that although not everything had been achieved in terms of targets, there was still a lot of progress achieved. He mentioned that party politics are essential to address when considering who is hired for government positions. He praised the Committee and DPW's vigilance and their effectiveness and compared it to America who he said had no idea where $200 billion in public works was going according to an article he had read. 

The meeting was adjourned.