The Department of Public Works (DPW) gave an update to the Committee on issues raised by the Auditor-General in the 2010 Annual Report of that Department. The first presentation presented the financial position as at 31 January 2011, setting out the figures for each of the programmes and explaining the spending. It was noted that infrastructure spending had decreased year-on-year by 2%. This presentation was followed by a report on the vacancies in the Department, which were currently at 1 384, of which 641 were funded positions, and the delay in filling vacancies was ascribed to the change in policy that required the jobs to be advertised externally as well as internally.
Members were not happy with the reports, nor with the explanations provided, which they felt did not address all the issues nor reflect what was in the written reports. They were concerned about “reallocations” and cited a number of instances in which funds had been allocated to specific tasks, yet no spending had taken place. This was particularly serious in relation to Expanded Public Works Programmes, which had the potential for job creation, and which addressed the poorest of the poor, and for spending on disaster relief, education and energy. Members asked what measures were in place to alert provincial heads of departments or divisional heads to over or under spending, and asked how often reports were submitted to the Chief Financial Officer and what was done with them. Two Members expressed concern with the mismanagement of
Department of Public Works update briefing: Issues reported by the Auditor-General in the 2010 Annual Report
Mr Sam Vukela, Acting Director General, Department of Public Works, said that his Department (the Department or DPW) would firstly present a document on the finances of the Department, and then a document referring to the DPW’s plan of action for the vacancies.
Ms Cathy Motsisi, Chief Financial Officer, Department of Public Works, presented the financial performance of the Department as at 31 January 2011. She explained the different decreases in expenditure by a year-on-year basis, highlighting the different items in the budget. She also noted that the only real area of concern was the item “infrastructural spending” which showed a decrease of 2% year-on-year on the spending of the allocated budget. (See attached document for full details and figures).
Ms Thembi Hlatshwayo, Acting Deputy Director General: Corporate Services, DPW, gave a presentation on vacancies in the DPW. She stated that there were 1 384 vacancies within DPW, with 641 of these being funded positions. She stated that levels 1 to level 8 targeted young professionals in para-statals. The change in policy resulted in jobs no longer simply being advertised internally, and this had resulted in the 641 job vacancies.
The Chairperson proposed that the Committee should engage with the financial report before moving on to the other progress reports.
Dr C Madlopha (ANC) requested clarity on the decreased departmental expenditure, from 39% down to 37% in January and February 2011. She said that Ms Motsisi had explained this as “reallocations”. She enquired why the DPW would be asking for more funds as it evidently could not spend the money that it already received.
Ms Motsisi explained the nature of the adjustments on a year-on-year basis. Most of the DPW projects showed a spending trend following an “S” curve rather than a straight line. This explained why a project that was due for completion in 2011 would have spent more in the previous years, during the initial phases of the project, and why less was being spent in 2011, which was the year in which the project would be finalised.
Mr Sithole noted that the section on expenditure analysis had isolated that certain functions had funds assigned to them, yet none of the funds had been spent, and he called for an explanation on this.
Mr W Doman (DA) asked what measures were in place to alert other departmental heads within the DPW if there was over or under spending in their divisions.
Ms Motsisi noted that the Exco of DPW, consisting of the Director General and the Deputy Directors General, would meet bi-weekly or weekly and also held special meetings with the finance department.
Mr Doman questioned why the
Mr K Sithole (IFP) also asked why the
Ms Motsisi responded that the DPW had requested a written response from the Chief Financial Officer of the Gauteng Provincial Department of Public Works.
Dr Madlopha noted that Ms Motsisi had stated that municipalities were failing to meet the performance threshold for spending on the Expanded Public Works Programme (EPWP), and therefore wanted clarity on the allocation to the EPWP. She wondered also if the DPW had a plan to address the failings by the municipalities, given the role that EPWP played in job creation, and given that job creation was a priority in the State of the Nation Address.
Mr Richard Samuels, Deputy Director General: Inner City Regeneration, DPW, stated that DPW had recalled retired engineers and artisans in order that they could train new and unemployed graduates. He also explained that project managers were accountable for each of their individually-assigned projects and that an expenditure monitoring system existed.
Mr Vukela conceded that EPWP expenditure was inadequate. DPW was building technical capacity within municipalities so they could claim the resources needed. However, there were capacity related issues that were delaying the process.
Ms Sasa Subban, Deputy Director General: Asset Investment Management, DPW, noted that a share energy savings model was used in most regions.
Ms N Madlala (ANC) asked when the
Mr Samuels said that the Deputy Minister had led a Greening Project and would report on National Youth Service (NYS) projects that had been done in the community. He also stated that the
Ms P Ngwenya-Mabila (ANC) asked about the role of National Treasury (NT), and whether it would make any interventions within the financial year. She insisted that NT should have a role.
Ms Ngwenya-Mabila asked why budget had been allocated to disaster-relief, yet no spending had occurred, which seemed to indicate that the allocation was not needed in the first place.
Dr Madlopha asked how frequently DPW would receive reports from provinces. If these were only received at the year end, then it would make it impossible to do the necessary interventions before the year-end. She also asked if this trend suggested that the DPW could meet the expectations of the Auditor-General (AG) for an improved financial situation.
Ms Motsisi summarised that there was ongoing interaction between the National and Provincial Departments, and that written responses were being sought from the provincial Heads of Departments (HODs).
Ms Ngwenya-Mabila asked how many of the quarterly reports DPW had received.
Dr Madlopha strongly insisted that the way in which the DPW conducted its business needed to change.
Mr Vukela confirmed that the Chief Financial Officer’s Committee would look at all reports.
A representative from the Attorney-General South Africa (AGSA) asked if the DPW did not have any policies that would avoid fiscal dumping at the end of the financial year.
Ms Motsisi noted that all regional managers had been informed of irregular payments from previous meetings, as a change in the reporting method, from the cash basis of accounting to the Generally Accepted Accounting Practices (GAAP).
Ms N Ngcengwane (ANC) noted that the EPWP assisted unskilled workers, a very important aspect, so to spend only 27% of the total budget allocated to this was inadequate.
Dr Madlopha also enquired about the types of jobs that the EPWP offered, asking if these jobs were decent and sustainable jobs. She also noted that EPWP was an intervention to fight poverty
Ms Ngcengwane also noted that the spending on the Sector Education Training Authority (SETA) was at 0%, and enquired why this was so, and furthermore why “energy expenditure” was also reflected as 0%.
Mr Vukela responded that technical support, from the private sector, would be used to improve energy under-spending.
A COPE Member asked about the use of private consultants.
Ms N November (ANC) noted that most of her concerns were shared by other Members who had already asked their questions. She enquired if the Minister of Public Works had raised any different issues. Most of the responses now being given had been offered already in the past.
Ms Ngwenya-Mabila enquired how many posts were not filled, and the reasons why they had not been filled.
The Chairperson questioned why the number of vacancies in the Department was always changing.
Ms Hlatshwayo explained that staff were always leaving or retiring, and the administration department struggled to always state a set number of vacancies.
Mr Doman noted that there a number of people acting in the Department, and he asked how the DPW conducted its work properly, when so many people were in Acting positions, particularly in the Human Resources and Corporate Services divisions. He asked the difference between these two divisions,and whether there were vacancies within them.
Ms Hlatshwayo responded that Corporate Services included legal affairs, security and human resources directorates.
Ms N Ngcengwane (ANC) asked whether there was a policy around vacancies within DPW.
Mr L Gaehler (UDM) agreed that the explanation around the changing vacancy rate was confusing, particularly since DPW should know how many people were scheduled to retire. He agreed that the DPW faced a structural problem when so many of the senior management were in acting posts. This seemed to account for the repeatedly qualified reports that DPW would receive.
Mr Doman asked for an explanation of the difference between funded and unfunded positions.
Mr Vukela explained the difference between funded and unfunded jobs. He said that those that were not funded still appeared on a listing, and it was proposed that these should be deleted, if it was clear that government could not afford to fill these posts.
Mr E Magubane (ANC) noted that vacancies were still available despite the fact that so many people were unemployed. He asked what exactly was preventing people from being employed.
The Chairperson requested whether there was a deadline for filing the vacancies.
Mr Vukela stated that June 2011 was the deadline date.
Dr Madlopha asked why DPW was asking for more if it could not spend what it already had.
Ms Motsisi said that the current budget did not include compensation for employees.
Mr Samuels proposed that perhaps the DPW needed to respond to the Committee more often.
The Chairperson then asked that the delegation address the questions around the use of consultants, and said that the Committee wanted to hear specific answers only, and not general comment.
Mr Vukela noted that consultants were being used because the Department faced internal lack of capacity.
Ms Ngcengwane asked when external consultants would be employed.
Ms Subban responded that external consultants would be used as data capturers.
Ms Motsisi added that from 1 April 2011 service providers would be employed, and 9 March 2011 was the closing date for tenders on a particular project. She stated that outsourcing was based on the need to get in expertise to deal with some of the fundamentals.
The Chairperson noted the disparity in stated dates of employment of the compliance officer.
Ms Ngwenya-Mabila asked why DPW was outsourcing internal auditing to Sizwe Ntsaluba, as opposed to attending to this itself.
Dr Madlopha expressed her concern that the DPW’s internal auditors did not seem to be able to track peculiar trends in the same way that the Auditor-General was able to do this.
The Chairperson said that she and the Committee were expecting serious and accurate reports tob e compiled by DPW. She stated that it was unacceptable that the reports did not reflect what the Department was presenting.
The meeting was adjourned.
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