Independent Development Trust on Mandate, Budget & Strategic Plan

Public Works and Infrastructure

22 June 2009
Chairperson: Ms L Hendricks (ANC)
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Meeting Summary

The Chief Executive Officer and Executives of the Independent Development Trust briefed the Committee on the mandate and strategic plans of the Trust.  The key objective of the IDT was the alleviation and eradication of poverty by the implementation of development projects and training programmes, mainly in the rural areas of South Africa.  The briefing focused on the corporate strategy of the IDT rather than extensive details of the actual projects managed by the Trust.  Funding for the IDT was derived from interest earned on the original capitalisation investment of R2 billion.  The IDT did not receive any additional funds from National Treasury.  Funding for the implementation of specific development projects were transferred to the IDT from the Government Department concerned.

Members asked questions about the accessibility of the IDT in rural areas, the involvement of other Government Departments in IDT programmes, the alignment of IDT programmes with Government’s policy on poverty alleviation, the measurement of the success of the programmes implemented by the IDT, the accountability and monitoring of delivery by the Committee, the use of consultants by the IDT and the extent of skills transfer and involvement of women, the youth and small contractors in IDT projects.

Meeting report

Briefing by the Independent Development Trust (IDT)
Ms Thembi Nwedamutswu (Chief Executive Officer, IDT) introduced the delegates from the IDT to the Committee: Prof Edith Vries (Executive Head, Office of the CEO) and Mr Ayanda Wakaba (Executive).

The briefing to the Committee included a statement of compliance, overview of the IDT, the amendments made to the mandate of the IDT since the establishment of the Trust, the interpretation of the mandate, the business model of the IDT, the vision and mission of the Trust and the core business areas (see attached document).  The IDT was capitalised at its inception with a R2 billion allocation from Government.  The operations of the Trust were subsequently funded from the proceeds of the investment of the original allocation.

Prof Vries presented an executive summary of the 2010/2030 strategic vision of the IDT.  The main focus of the IDT was the eradication of poverty in South Africa.  To achieve the strategic vision of the Trust, objectives were developed for achievement in the long-term, medium-term, short-term and immediate future.  The three key roles identified were advocacy of the IDT, the development and implementation of operational programmes, the application of best practice and the building of capacity in the country.  Key components of the strategy included the sourcing of funding for programmes (leverage), effective co-ordination, the integration of principles and embedding competitive advantage in the corporate culture of the IDT.

The presentation included a summary of the key performance indicators for each of the three strategic objectives.  Details of the alignment of IDT programmes with national priorities were provided.

Prof Vries concluded the presentation with a summary of the key content issues and supporting frameworks included in the 2010/12 corporate plan.

Discussion
Nkosi Zwelivelile Mandela (ANC) remarked that extreme poverty tended to be more prevalent in the rural areas.  He asked if the IDT was accessible to the rural population and what measures were taken by the IDT to become known to people in the less-informed regions of the country.  He remarked that the Integrated Development Plans (IDP’s) of municipalities tended to apply to urban areas rather than rural areas.

Mr James Masango (DA) asked for details of the involvement of other Government Departments in the programmes implemented by the IDT.  He asked if the IDT had retained the original R2 billion capitalisation investment.  He wanted to know to what extent the IDT had managed to alleviate poverty.  He asked if practical interventions by the IDT had managed to contain poverty and which areas had been targeted.  He noted that the objectives of the IDT were aligned with ASGISA but wanted to know if the GIFSA targets were taken into account as well.

Mr L Gaehler (UDM) requested details of infrastructure development programmes completed in the Eastern Cape.

Mr P Mnguni (COPE) said that memoranda of understanding (MOU’s) were signed for the Extended Public Works Programme (EPWP) but excluded the requirement to follow up to ensure that the programme had been fully implemented and had achieved the desired result.  He cited the example of EPWP programmes initiated in 2004 in the Rustenburg municipality.  In that case, the IDT had facilitated training programmes but the trainees remained unemployed.  It would appear that the IDT had abandoned the responsibility for ensuring the success of the programmes to the municipality concerned.  He said that the programmes were put on hold when different political parties came into power in the municipality.  He remarked that trainees were not necessarily employable.  He asked what measures were taken by the IDT to ensure that the desired results were achieved.

The Chairperson remarked that the IDT could not be held responsible for political in-fighting in municipalities.

Ms N Dlulane (ANC) asked if all the necessary information on the IDT had been circulated to the Members of the Committee prior to the meeting.  The Chairperson replied that all the documents had been circulated.

Ms Dlulane noted that the IDT did not receive any funding from Government.  She asked how the IDT could be held accountable and how the Committee could monitor delivery if there was no financial accountability.  She requested further details of the IDT’s programmes for the expansion of capacity in local and provincial Governments.  She noted that the IDT spent 13.1% of the budget on consulting fees.  She asked if the extensive use made of consultants was detrimental to the development of capacity within the IDT.  She asked if the decisions taken by the Cabinet in 1997 on social development and poverty alleviation had been implemented.

Ms Nwedamutswu replied that the IDT’s corporate strategy was in line with the social development objectives of Government.  She said that the IDT had the ability to change its mandate and re-align itself in accordance with changing Government policies and objectives.  Since 1997, the IDT became more reactive and had implemented all the projects commissioned by Government.  She explained that funds for the implementation of specific projects were transferred from the Government Department concerned.  For example, the Department of Education transferred the funds necessary for the building of schools by the IDT.

Ms Nwedamutswu explained that the IDT was a Schedule 2 entity and funded its operations from the interest earned on the original R2 billion capitalisation investment.  The IDT used its own funds for programmes designed to eradicate poverty.  In previous years, the IDT did not charge a management fee for the implementation of Government Departments’ projects.  This practice resulted in the funding for management expenses granted by National Treasury being retained by the Department concerned.  At the request of National Treasury, the IDT currently charged a management fee for projects implemented on behalf of Government Departments.

Ms Nwedamutswu explained that the IDT made use of consultants to provide the scarce, expensive skills required for specific projects.  It was not economically viable for the IDT to employ persons with the necessary expertise on a full-time basis.  The fees paid to consultants were in accordance with the Gazetted fee structures.  She pointed out that the major portion of the IDT’s budget (48.9%) was spent on the salaries of permanent IDT personnel.

Ms Nwedamutswu confirmed that the IDT was accountable to the Committee and encouraged the oversight role played by Members.  She confirmed that the IDT had retained the original R2 billion invested by Government but said that the Trust planned to approach National Treasury for additional capitalisation funding.

In response to Mr Mnguni’s questions, Ms Nwedamutswu said that in accordance with the first EPWP programme, the IDT was only responsible for providing training to improve the capacity of the Rustenburg municipality.  The IDT felt that it had performed well but she undertook to conduct an investigation into the particular case concerned.

Ms Nwedamutswu said that the IDT project to replace the “mud schools” was initiated in 2006 when many of the schools in rural areas were damaged by the heavy rains.  The initial analysis by the IDT indicated that funding of R2.1 billion was required from National Treasury to replace all the mud structures.  An amount of R150 million was granted, which allowed the IDT to attend to the most critical schools.  She felt that a good result was achieved in spite of the lack of accessibility and supporting infrastructure in many rural areas.  She invited Members to visit some of the completed projects.

Ms Nwedamutswu advised that Government Departments had transferred a total amount of R2.1 billion to the IDT for the implementation of development projects during the current year.  The IDT had achieved unqualified audit reports for the previous six years.  She said that the GIFSA projects were not funded by Government but the IDT was the only organisation involved with implementing these projects.  Funding for GIFSA projects were allocated to the Departments of Labour, Trade and Industry (for the Jobs for Growth project) and Higher Learning.  The Jobs for Growth project had however been transferred to the IDT and the funding for the programme was expected to be transferred as well.

Ms Dlulane said that 917 “mud schools” were originally identified.  The IDT’s target was to replace 30 schools by March 2008 and a further 60 schools by August 2008.  She asked if the targets had been met.  She wanted to know what criteria the IDT applied to prioritise the schools for upgrading.

Mr Gaehler remarked that the dependency on consultants to provide skills was of concern as the practice did not result in the transfer of skills.  He asked if the IDT monitored the involvement of small contractors, women and the youth in the projects and if the transference of skills to these groups were measured.

Ms Nwedamutswu replied that the Department of Education was responsible for the prioritisation of schools earmarked for upgrading.  She said that the availability of teachers, furniture and equipment and books was also taken into account when schools were prioritised.  The IDT’s original intervention was intended to replace the schools that had collapsed in 2006.

On the issue of consultants, Ms Mwedamutswu said that consultants were paid a fee for delivering a particular expert service.  If consultants were required to provide training in addition to the normal service, a charge for training would be incurred.  The IDT employed trainers on a full-time basis and had a three-year plan for capacity development.  She confirmed that the IDT monitored all aspects of the programmes and projects undertaken and had an extensive IT system in place for the purpose.  She invited Members to visit the IDT’s site.

Mr Wakaba provided additional information on the IDT’s programmes.  He presented slides with details of the targets for each province for 2008/09.  The poorer provinces (e.g. the Eastern Cape and KwaZulu Natal) were allocated proportionally more resources than the wealthier provinces.  Details of the expenditure per type of project were provided.  With regard to “mud schools”, the IDT’s focus since 2007 was changed from replacing classrooms only to replacing the whole school with a solid structure and providing ablution facilities.

The Chairperson thanked the Members, delegates from the IDT and other attendees for their participation.

The meeting was adjourned.

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