Community Library Grants: Provincial spending: public hearings

Meeting report

Spending of Conditional Community Library Grants: Public hearings with Provincial Departments of Sports, Arts, Culture and Recreation
Free State Province
Ms Jacomien Schimper, Director: Library and Archives, Free State Department of Sports, Arts, Culture and Recreation, said that the Department had budgeted for the provision of ICT infrastructure to 59 libraries, the maintenance of existing infrastructure, photocopiers to 30 libraries, furniture to 23 libraries, audiovisual (A-V) equipment, the upgrading of security at 35 libraries, the upgrading of library collections with 50 000 publications, services to visually impaired at 15 libraries, the improvement of staff capacity, transfers to municipalities, the promotion of a culture of reading and the administration of the grant.
It had spent 59% of its budget allocation at the end of the third quarter. The under-expenditure had occurred as a result of a delay in the delivery of ICT infrastructure equipment and the installation of networks, over-budgeting for the maintenance of photocopiers and late invoicing, the installation of burglar alarms. The appointment of security services was not achieved owing to non-responsive bid documents as well as Provincial Treasury’s (PT) policy directives on the arrangement of security guards, and the Department of Public Works (DPW) experiencing challenges in appointing contractors for security fencing. There were challenges in the appointment of contractors for the Philippolis library. Municipalities had failed to submit the required documentation around transfer payments. There was delayed recruitment. A service level agreement with the Library for the Blind was still needing to be finalised.

The Conditional Grant had allowed for the upgrading of 20 libraries’ collections, the improvement of 59 libraries’ ICT infrastructure, additional staff being positioned at 50 libraries, photocopiers at 30 libraries, and the improvement of infrastructure (renovations and security) at 10 libraries.

The Department’s plans to address the challenges included obtaining approval to amend its business plan in order to redirect under-expenditure to other projects where contracts were in place and delivery could be fast-tracked. It also intended to obtain approval from Provincial Treasury to deviate from directives on the arrangement of new contracts, especially security contracts. It would appoint an infrastructure manager to assist the Department of Public Works with infrastructure contracts, and improve the monitoring of infrastructure projects. It would enter into a Service Level Agreement with the Department of Public Works and Department of Rural Development and Land Reform in order to have a framework for service delivery. It would expand the database of suppliers of library materials in order to have alternative suppliers in case of non-delivery, and would strengthen the management capacity in the Library Services Directorate.

The Department had, by the end of the fourth quarter, spent 99.69% of its total budget allocation.

In terms of monitoring, the Department held Financial Control Committee meetings chaired by its Head of Department, conducted expenditure trend-tracking through its Chief Financial Officer and appointed Finance, Supply Chain Management and Human Resources clerks to focus on its grant commitments. Its reporting system included quarterly reports to the National Department (as well as National Treasury via Provincial Treasury), monthly in-year monitoring reports, as well as monthly progress and evaluation reports by Budget Managers.

Discussion
Mr B Mashile (ANC, Mpumalanga) asked why there had been a problem with fencing contractors as this was not a specialised area.

Ms Schimper answered that the Department of Public Works had indicated that problems were experienced in the previous financial year with its supply chain unit. This had led to delays with project implementation.

Mr M Makhubela (COPE, Limpopo) asked whether any money was lost in relation to problems with contractors and whether this money would be recovered. He also enquired as to the effectiveness of the Department’s internal controls.
 
Ms Schimper answered that no money had been lost as the contract had been cancelled before any work had commenced. When it was discovered that invoices were not being submitted on time, this issue was raised and subsequently rectified.

Eastern Cape
Ms Xoliswa Tom, MEC for Sports, Recreation, Arts and Culture, Eastern Cape, said that her Department had, at the end of the third quarter, spent R30.1 million of its allocated R55.5 million budget. Reasons for this deviation were listed. She said the building of a new library could not take off as there had been challenges around the capturing of the infrastructure budget in the Department, but this project would continue in the next financial year. There had been delays in the appointment of 12 librarians (who had subsequently been employed). There were delays in the procurement of ICT equipment due to renovations in those libraries (but this equipment would be procured in the next quarter). The project in relation to container libraries was on hold owing to challenges encountered in the previous financial year. However, this budget had since been redirected and the project would continue in the next financial year. There were delays in the literacy programme because of challenges with the payment of stipends to trainers. These trainers had subsequently submitted the required documentation and the project was set to continue. There was a lack of credible service providers for the training of library workers. She reported that now local institutions had been approached for assistance.

In terms of its monitoring, the Department had centralised the administration of this Conditional Grant. It also received assistance from local municipalities on staff deployed in community libraries. It also had a monitoring and evaluation component that assisted in ensuring that projects were carried out according to plan. For ICT purposes, three network controllers were employed to work together with State Information Technology Agency (SITA) on all ICT projects. User and circulation statistics at community libraries were also monitored by both municipalities and districts.

Ms Tom noted that there were still some constraints, which included SITA delays in the implementation of projects, the Department of Public Works having categorising the Department’s projects as incubators and remaining Constitutional challenges around delivery of library services.

The Department’s actual expenditure and commitments stood at 66%. By the end of the financial year, however, the Department had reached 91.1% expenditure.

Discussion
Mr C De Beer (ANC, Northern Cape) asked why some of the figures this Department had listed in relation to its under-expenditure were different to those presented by National Treasury.

Ms Tom answered that the figures correlated with those of National Treasury once those listed under ‘commitments’ were added to those listed under ‘under-expenditure’.

Mr de Beer asked why only one tertiary institution was approached for the training of librarians.

Ms Tom noted that other tertiary institutions in the province did not offer courses in Library Science.

Mr Mashile asked why libraries were only paid in January, and enquired what had been the Department’s brief to the Department of Public Works.
 
Ms Tom answered that the time-consuming nature of the invoicing process and problems with this process had led to this late payment. The province’s main focus was on refurbishment and not on building. As the budgets for these refurbishments were smaller than those for building, consultants were not as eager to become involved in these projects. The province had asked the Department of Public Works to cluster these projects so as to make these projects more alluring to consultants.

The Chairperson asked what role these consultants played.

Ms Tom answered that the consultants assisted in the appointment of contractors.

Limpopo province
Ms Joyce Mashamba, MEC for Sports, Recreation, Arts and Culture, Limpopo, said that by the end of the third quarter, her Department had spent 61% of its budget, including commitments. She set out the relative expenditure in relation to Compensation of Employees, Goods and Services, and payment on capital assets, and noted that the Department made no transfers to municipalities from the Conditional Grant.
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The breakdown in terms of its capital expenditure stood as follows: Building and other fixtures – 72%, Audio-Visual equipment – 0%, Computer hardware and systems – 67%, Office equipment – 0%, Office furniture – 0%.

Expenditure in terms of this grant had increased from R40.045 million in the 2008/09 financial year to a projected R61.360 million in the 2009/10 financial year. The projected expenditure for the 2010/11 financial year stood at R62.733 million. This represented an increase of 133% between the 2007/08 and 2008/09 financial years.
Some of the capacity constraints which had led to under-expenditure were listed. These included contractors not being able to deliver on infrastructure projects, the delay in implementing the Ga-Phahla library, inadequate coordination of projects in collaboration with the implementing agent, inadequate project management capacity and monitoring and inadequate internal technical skills, which resulted in the Department having to rely on third parties.

Steps the Department had taken to redress under-expenditure included improving communication with the implementing agent in order to improve monitoring, and coordinating the Departmental Steering Committee and Library Forums.

Discussion
Mr Mashile asked whether transferring funds to municipalities assisted the Department in service delivery.

Ms Mashamba answered that, although municipalities had been slow to sign service level agreements, there had been some progress in this regard.

Mr Makhubela asked whether the Department had a follow-up plan in place when there was no delivery by contractors. He also asked how effective the Department’s internal controls were.

Ms Mashamba answered that the Department had resolved the matter of penalising these contractors, had revised the contracts and continued with the projects.
 
Western Cape
Mr Brent Walters, Head of Department, Western Cape Department of Sports, Recreation, Arts and Culture, said that his Department had spent 100% of its budget allocation. In terms of its expenditure trends, an increase of 8.5% was added in 2008/09 to its staff allocation of 2007/08. In 2009/10 a further increase of 10% was added. In addition, requests for literacy, maintenance and upgrading projects were considered. Its allocation per project was noted (see attached presentation) in relation to appointment of staff, maintenance projects undertaken, upgrading of libraries and sites established. 35 literacy projects were implemented  at a cost of R120 000. 20 rural public libraries received ICT infrastructure, access to the internet and library management systems , costingR1 515 000. He also noted that 6 000 copies of updated reference books were to be bought for all libraries, 18 000 copies of indigenous language books for the youth were to be bought for all libraries, 600 copies of literacy books to be bought for all libraries and eight staff members were appointed to coordinate and manage Conditional Grant projects.

Reasons for the under-expenditure in the third quarter included delays in the delivery of mobile book trolley by the supplier, delays in the delivery of library material by the supplier, and the final costs being less than budgeted for ICT equipment and mobile trolleys
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He reported on monitoring. The Department undertook 1 478 scheduled official visits. Individual municipalities also submitted their costed business plans, together with signed Memoranda of Agreement. Monthly focus meetings were held in order to keep track of expenditure trends, and monthly expenditure reports were submitted on a standard template that allowed the information to be analysed. Telephone calls and e-mails were used to follow up, and formal letters would be sent to municipalities who failed to submit reports. Monitoring visits to non-compliant municipalities, as well as those who requested assistance ,were also undertaken.

Northern Cape
Mr A Andrews, Senior Manager, Northern Cape Department of Sports, Recreation, Arts and Culture, said that his Department had spent 82.9% of its budget. Reasons for its under-expenditure included the fact that library materials procured through a bid process were not all delivered by year-end. He reported that a rollover of R1.591 million was requested. A transfer was withheld from one municipality as the municipality had not complied with the necessary transfer requirements. There were unspent capital asset funds as two of the three new libraries were not completed at year-end, and here a rollover of R9.78 million to complete these infrastructure projects was requested.

The Department’s 2009/10 business plan made provision for service delivery in rural areas, the implementation of a digital library service system in six sites, library usage and reading promotion programmes, which included the Run-to-Read campaign, and Northern Cape Writers Festival. It planned the construction of three new libraries, training of staff, transfers to municipalities, and IT infrastructure maintenance to 86 points.

This Department faced challenges around Supply Chain Management bid processes to procure library materials, as these materials were not delivered in time for them to be distributed within the financial year.

Discussion
Mr De Beer asked how many container libraries in the Province were without librarians and adequate books. He also asked what monitoring tools were in place.
 
Ms Pauline Williams, MEC, Northern Cape Department of Sports, Recreation, Arts and Culture, answered that all posts were filled.

Gauteng province
Ms Nelisiwe Moerane, MEC for Sports, Recreation, Arts and Culture, Gauteng, said that, of her Department’s total allocation of R47.774 million, it had spent R46.37 million. The City of Johannesburg’s budget breakdown was given. R4.322 million was set aside for employment of 16 librarians, five library assistants and eight part-time training librarians, and R2.678 million for the upgrading of electronic library systems. The City faced a challenge in the delay in the implementation of all IT-related projects, due to the IT service provider having filed for voluntary liquidation.

The breakdown of the Ekurhuleni municipality budget was given (see attached presentation for details). The municipality noted that the mobile library had not been purchased, as the municipality withdrew municipal funds for the chassis, and the informational and educational resources were still on order as there had been a problem with the municipal procurement department.

The City of Tshwane’s budget breakdown was given. This municipality experienced serious challenges and delays around procurement, and changed library priorities had necessitated the amendment of its business plan.

The Lesedi municipality’s budget breakdown was given (see attached presentation for details).

The Department had noted challenges relating to implementation in several areas. The time frames of the Conditional Grant were very restrictive, the turn-around time for the application of amendments to business plans were too long, and subsequently delayed project implementation, and funds were transferred late due to the conclusion of Conditional Grant agreements being slow and time-consuming. The decision-making in municipalities was adversely affected by either the suspension of municipal managers or vacant managerial posts.

Discussion
Mr Makhubela asked what measures the Department had in place to deal with the challenges it faced.

Ms Moerane answered that, in addition to establishing a forum together with municipalities, the Department had also looked into streamlining the procurement processes of municipalities.

The Chairperson asked whether the Memoranda of Understanding between the Department and municipalities allowed for any recall of funds allocated for programmes.

Ms Moerane answered that there was, at present, no such provision in the Memoranda of Understanding.

KwaZulu-Natal province
Ms C Khumalo, Head of Department, KwaZulu-Natal Department of Sports, Recreation, Arts and Culture, said that the Department had been allocated R34.147 million for the 2009/10 financial year. It had under-spent by R4.994 million as a result of a R1.44 million rollover and R3.55 million under-spent on the Mbazwana library depot project.  Under-expenditure in relation to this project was due to contractor challenges.

She reported on the Department’s monitoring process, saying that monthly financial data was submitted to the National Department as well as National Treasury. Quarterly reports and review meetings were also held with the National Department and National Treasury. In addition, it conducted internal audits on the expenditure of this Conditional Grant. It also conducted site inspections of infrastructure projects and cyber cafes.

Discussion
Mr Makhubela asked whether there were any penalties imposed on builders who did not meet their deadlines.

Ms Khumalo answered that service level agreements were signed, in which it was made clear that a contractor would incur penalties if that contractor was responsible for delays.

North-West Province
Ms T Sempe, Acting Chief Director, North-West Department of Sports, Recreation, Arts and Culture, said that the Province’s total allocation in terms of this grant was R54.8 million. It had under-spent by 25% as a result of delays with the appointment of building contractors, and mobile library buses not being delivered by the service providers. Challenges it faced related to supply chain management. In terms of compliance with reporting, the Department submitted monthly reports to the National Department as required. It did, however, face a challenge with getting municipalities to submit monthly reports. In this regard it had held a meeting with all the relevant municipalities in order to address these delays.

Discussion
The Chairperson asked for the Department’s business plan to be submitted in writing, in order for the Committee to better measure the Department’s achievements.

The meeting was adjourned.