Community Library Services Grant: National Treasury, Department of Arts and Culture, & provincial departments of Arts & Culture of Northern Cape, North West, Eastern Cape, & KwaZulu-Natal: briefings

NCOP Appropriations

24 May 2011
Chairperson: Mr T Chaane (North West, ANC)
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Meeting Summary

The Committee met with National Treasury, the Department of Arts and Culture, and provincial departments of Arts and Culture from the Northern Cape, North West, Eastern Cape, and KwaZulu-Natal to discuss the expenditure in the 2010/11 financial year on the Community Library Services Grant. The preliminary outcome for expenditure as at 31 March 2011 was 87.9%. During the first three quarters the provinces spending the slowest were the Eastern Cape, KwaZulu-Natal, Limpopo, Mpumalanga, Northern Cape and North West. Reasons for the slow expenditure varied across provinces, but the most common were internal supply chain management issues, the delay in the appointment of contractors, the slow upgrading of projects, and late purchasing of items of library material due to the delayed appointment of service providers.

In the Eastern Cape provincial officials cited misunderstandings with the local community as leading to delays in the project. Further investigation had also revealed challenges with the contractors’ delivery performance. KwaZulu-Natal had improved its performance compared to the same period the previous year but internal supply chain challenges led to a slow start to projects and therefore expenditure. In the Northern Cape there was a delay in finalising Service Level Agreements with municipalities and therefore a significant decline over the previous year’s expenditure. In the North West the execution of planned projects was still very slow, despite funds being made available for capacity building, including staff.  

Members wanted to know what plans were being put into place to address the challenges the provinces were facing. The filling of crucial posts was of concern as some posts had been vacant for the past two years. Members thought that library committees were a good idea and that all provinces should appoint them. Members advised that the problem of contractors who experienced cash flow problems also had to be sorted out. Members also advised provinces to strengthen their relationship with the Department of Public Works as the working relationship between them was important for the implementation of infrastructure projects.   


Meeting report

National Treasury: presentation
Mr Edgar Sishi, Director: Provincial Budget Analysis, National Treasury, gave the expenditure as at 31 December 2010 (53.3%). At that point in time, the Eastern Cape, Mpumalanga, and Northern Cape were spending lower than expected. Year-on-year growth was 6.8%. Gauteng, the Western Cape, and Free State were performing the best with regards to expenditure. Mr Sishi went on to explain the spending vs. transfers received as well as the preliminary outcome as at 31 March 2011. The preliminary outcome percentage of the adjusted budget was 87.9%, with an 18.0% year-on-year growth.

Mr Sishi explained the issues affecting expenditure. During the first three quarters, many provinces were spending poorly. In the Eastern Cape, slow progress on the Mdantsane library project was raised as a challenge. Provincial officials cited misunderstandings with the local community as leading to delays in the project. Further investigation had also revealed challenges with the contractor’s delivery performance. In KwaZulu-Natal, performance had improved compared to the same period last year, but internal supply chain challenges led to a slow start to projects and therefore expenditure. In Limpopo the upgrading projects and the purchasing of library material was delayed by the slow appointment of service providers. The province of Mpumalanga struggled to manage its internal supply chain processes, as well as contractor performance. Most expenditure only took place in the fourth quarter. In the Northern Cape there was a delay in finalising Service Level Agreements (SLAs) with municipalities, and therefore a significant decline over the previous year’s expenditure. In the North West, the province was clearly recovering from a “low base” with regard to spending performance, but the execution of planned projects was still very slow. 

Mr Sishi gave some solutions to addressing these challenges. In order to safe-guard the use of public funds, supply chain regulations could be exacted. However, it was clear that provinces could manage these processes in a more efficient manner. Reports highlighted delays in the procurement processes of Eastern Cape, Free State, Limpopo, Mpumalanga and North West. Much of the shortfalls involved infrastructure upgrades and new buildings. Various initiatives and support systems were currently being implemented by the National Treasury and should improve the situation, including the following:

Building technical and planning expertise could improve the performance of Public Works departments and therefore the delivery of library infrastructure projects.

Donor funding for these and other programmes was being sourced and the development aid process would be integrated into the budget process going forward.

Ultimately, the success of these and other initiatives would be greatly improved by a more engaged provincial management, as well as stronger leadership and oversight by accounting officers over community library programmes.
 
Discussion
Mr M Makhubela (Limpopo, COPE) said that the provinces should address comments regarding their own provinces.

The Chairperson agreed that Members should pose questions to the individual provinces once the provinces had completed their presentations.

Northern Cape: presentation
Mr Faisel Aysen, Head of Department, Department of Sport, Arts and Culture: Northern Cape, explained the projects that the province had and the alignment to objectives. With regards to increase staff capacity, the objective was to improve staff capacity at urban and rural libraries to appropriately respond to community knowledge and information needs. The province also wanted to improve library infrastructure and services that reflected the specific needs of the community. The province had increased staff capacity by 125 and implemented seven training programmes. Items of library material were increased by 6 200 and five promotional projects were rolled out. Mr Aysen then explained the quarter three variances from the target. With regards to infrastructure, the construction of the Nababeep library had been delayed. With regards to transfers to municipalities, not all transfers to municipalities could be executed due to the non-compliance to requirements. Delays were also experienced in the delivery of library material from suppliers. Overall, the province had spent 79.4% of its budget as at 31 March 2011.

Mr Aysen continued by giving reasons for the 2010/2011 third quarter under-spending. Due to capacity and oversight constraints in the departmental support functions (human resources (HR) and finance), delays were experienced in the recruitment and selection and payment processes. With regards to payments for capital assets, delays were experienced in terms of the infrastructure projects and the information and communications technology (ICT) roll-out. The department was monitoring the transfers; monthly progress reports were submitted by municipalities. The department, through its district offices conducted regular visits to municipalities to ensure adherence to the business plans. Where municipalities did not comply, interventions were made to ensure compliance through correspondence and meetings with municipal officials concerned.

Mr Aysen said that challenges included that infrastructure projects were normally done through a third party, and in this instance delays were experienced. This infrastructure included the construction projects as well as the ICT projects where the third parties concerned were the provincial Department of Roads and Public Works as well as the State Information and Technology Agency (SITA). Capacity constraints were also experienced at a municipal level that caused a delay in the submission of correct and compliant business plans. The 2010/2011 business plan made provision for the following: 
Service delivery in rural areas;
Implementation of a digital library service system at 114 sites;
Library usage and reading promotion programmes;
Construction of one new library;
Training of staff – third annual Library Services Symposium;
Targeted services like toy libraries;
Information technology (IT) infrastructure maintenance to 86 points.

There were no deviations from the 2010/11 business plan. However, the business plan was amended to utilise projected under spending for the compensation of employees and on projects such as the liberation struggle heritage legacy book project, the management of information systems, and solar panels for containers.

Discussion
Mr Makhubela asked how the capacity constraints experienced by the province would be addressed.

Mr Aysen replied that the previous head of department (HOD) had failed to have crucial posts filled as required. Therefore there was currently a backlog in staff appointments, but these were currently being attended to.

The Chairperson commented that there was a difference in figures presented by National Treasury and those presented by the provincial department. He wanted to know how often meetings were held between the provincial Department of Sport, Arts and Culture and the provincial Department of Roads and Public Works.

Mr Aysen replied that meetings were held on a monthly basis.

Mr M Makhubela asked how soon crucial posts would be filled.

Mr Aysen replied that crucial posts were in the process of being finalised and by 01 July 2011 all posts would be filled.

Mr C de Beer (ANC, Northern Cape) said that he liaised regularly with the Northern Cape. He wanted to see the Department play a more stringent oversight role. He noted the idea of provincialisation, as spoken about by National Treasury and thought that this was a good idea. 

Eastern Cape: presentation
Mr Mzolisi Matutu, Head of Department, Department of Sports, Recreation, Arts and Culture: Eastern Cape, gave a brief explanation of the purpose and objective of the grant, which was to enable South African society to gain access to knowledge and information that would improve their socio-economic situation. The expected outcomes were an improved library infrastructure and services that reflected the specific needs of the communities they served. 79 libraries had been renovated since the inception of the grant. Two libraries were under construction in Mdantsane and Mount Ayliff. This had improved library usage as these libraries were now accessible. Transformed and equitable library and information services had been delivered to all rural and urban communities. During 2010/11, a total of 70 000 items of library material had been purchased and delivered to public libraries. The project list for 2010/2011 included the compensation of employees, books and materials, literacy programmes, and the purchase of library containers, amongst other things.

Mr Matutu explained that with regard to the output of library upgrading and rehabilitation, the province had only spent R1.3 million from a total allocation of R5.5 million. The reason for this was due to the appointment of contractors which was delayed at Public Works. Mobile container libraries and improved library security was also delayed because the tender was already advertised but had to be re-advertised as a result of a KwaZulu-Natal (KZN) judgement. Targets that were met included functional library committees that were revived and established and literacy and advocacy programmes were provided in community libraries.

Mr Matutu went on to present third quarter performance indicators and targets. Some constraints included that infrastructure projects were awarded to emerging contractors by Public Works and these contractors always had cash-flow challenges. This affected completion periods and service delivery. SITA also had delays in billing because their invoices came from their head office. Staff turnover was a challenge as staff resigned constantly as a result of the conditions of their employment, which was contractual. This impacted service delivery especially at public libraries as some libraries had to be closed again. Remedial actions included that projects were submitted to Public Works on time so that contractors could start early and be able to finish their works within a financial year. Meetings were held with SITA to re-negotiate to have them de-centralise its billing system at national level. To help with staff turnover, conditional staff should be incorporated into the Equitable Share to ensure sustenance and continuity.

With regards to monitoring capacity, the department had a monitoring and evaluation unit under its Strategic Planning Management component that was assisting in ensuring that projects were done according to business plans. Reporting was done monthly and quarterly. These monthly and quarterly reports were submitted to the Department of Arts and Culture and quarterly report meetings were held. Some achievements from the province included new libraries and all tenders were awarded. All libraries targeted for ICT infrastructure had been cabled and provided with computers. The province had now provided internet and email facilities to 88 libraries in the province.

Mr Matutu said that, in conclusion, the high priority in the province was the provision of infrastructure to its libraries but unfortunately infrastructure was not implemented as fast as projected. Due to the appointment of more librarians, libraries that were closed and others opening for short hours were now operating normally.

Discussion
Mr De Beer said that the establishment of library committees was a good idea, and should be followed by other provinces.

Mr Matutu said that this was essential for the selection of books, and was very helpful for community development as well.

Mr Makhubela noted the cash flow constraints that were experienced by contractors. He said it would not be possible for these contractors to finalise projects within one financial year if they had problems with cash flow.

Mr Matutu replied that the department had gone to financial institutions to ask whether loans could be given to contractors, and the payments deferred whilst waiting for the department to fund projects. From a meeting held with ABSA, they made some progress but this was still an ongoing process. 

Mr Makhubela wanted to know how effective monitoring was.

Mr Matutu responded that monitoring was very effective as municipalities were interrogated on a monthly basis.

Mr Makhubela asked how often meetings were held with SITA regarding difficulties experienced.

Mr Matutu replied that meetings with SITA were held on a monthly basis regarding various issues of ICT challenges. 

North West: presentation
Mr M Chauke, Member of the Executive Council (MEC), Department of Arts and Culture: North West, presented the province’s performance on the grant. The outcomes listed were the following:
Improved conditions and collaborations between national, provincial and local government of library services;
Transformation and equitable library and information services to all rural and urban community libraries;
Improved library infrastructure and serviced that reflects the specific needs of the North West community;
Improved culture of reading;
Improved staff capacity at urban and rural libraries to appropriately respond to community knowledge and information needs.

With regards to governance structures, quarterly forum meetings were held in all four districts. From a target of procuring 60 000 items per annum, 31 407 items were procured. The reason for the variance was because most of the service providers were only activated during the second quarter of the financial year. A total of 10 toy libraries were to be delivered during the fourth quarter and one mini library was established for the visually impaired. New library structures were planned; one project for the second and third quarters and two projects for the fourth quarter. These were on target and transfers were made to Dertig and Boikhutso. The province also wanted to introduce a mobile library bus service to promote library services and reading awareness programmes. However, the department could not place an order because the service provider was on hold. The province targeted holding four events to raise awareness on reading of books written in indigenous languages. This target was met.

With regards to quarterly expenditure, the total allocation for 2010/11 was R59.3 million. The total transferred from the first to the third quarter was R50.9 million. Expenditure for the third quarter was R14.1 million and the total expenditure for the first to the third quarter was R34.5 million. Challenges experienced were that the department lacked an effective system of supply chain management which resulted in delays in approving tenders and appoint service providers to implement projects. There were also delays in the filling of vacancies. Posts were advertised in May 2010 but were only filled in December 2010 and March 2011. The implementation of capital projects was also delayed by local municipalities which failed to appoint consultants and contractors on time. 

Mr Chauke explained that some remedial steps included improving the turnaround time to approve tenders and appoint service providers to implement projects. Evaluation would take place within 14 days after the closing of the tender and adjudication would be done within seven days after evaluation and the tender must be awarded within seven days after adjudication. The human resource component must improve the turnaround time to fill vacancies and adhere to the three months period. The department had also taken a decision to take over building projects of community libraries. The provincial Department of Public Works, Roads and Transport would serve as the implementing agent. Local municipalities that had shown commitment would be allowed to finish the projects that had already been started.

Discussion
The Chairperson said that the province was found to be one of the under spending provinces, by only having spent 60% at the end of March 2011. He wanted to know why this had happened.

Ms Tinyiko Sempe, Head of Department, Department of Arts and Culture: North West, replied that the reasons for the under expenditure were the challenges in supply chain management. Many projects could not be implemented due to not having service providers who were being awarded tenders.

The Chairperson asked if the province would be requesting a roll-over amount.

Ms Sempe replied that it had already applied for a roll-over amount for committed projects, which included the mobile libraries. The mobile libraries were ordered through the provincial Department of Public Works, Roads and Transport but it had failed to deliver them on time.

Ms T Memela (KwaZulu-Natal, ANC) asked whether teachers were also being trained in the importance of literacy through this grant.

Ms Sempe replied that this grant mainly focused on early education by means of the toy libraries as well as more adult (Adult Basic Education and Training) ABET learning. These educators were taken through the library centres and trained on the usage of materials.

The Chairperson asked whether the figures for staff appointments were correct, because they showed only one appointment was made.

Ms Sempe replied that that the figures were incorrect as six positions for library assistants had been filled. Other positions were still in the pipeline with interviews and short listing taking place.

The Chairperson wanted to know what types of remedial actions were put in place to address the shortage of staff.

Ms Sempe responded that posts had been advertised in the newspapers already and finalisation was taking place. Remedial actions included that human resources had to be strengthened.

KwaZulu-Natal: presentation
Ms Carol Slater, Senior Manager, Department of Arts and Culture: KwaZulu-Natal, presented the provincial performance. Outcome 1 was to create a transformed and equitable library and information services delivered to all rural and urban communities. The output was to purchase library materials. The total expenditure on books was R9.9 million. This exceeded the planned budget of R6.8 million; there was a higher demand for tertiary texts. Late buying in 2010/11 was due to waiting on approval of buying procedures. A challenge was an increase in requiring specific texts. Outcome 2 was to improve library infrastructure and services that reflected the specific needs of the community. Five new libraries were installed in Dundee, Kokstad, Ulundi, Eshowe and Howick West. 47 libraries continued to receive support (connectivity plus cyber salaries). Challenges with regards to the Information and Communications Technology (ICT) programme was that there was no functional support provided by SITA. The online system required fast internet connections, and processes in many cases required additional staff capacity.

Outcome 3 was to improve library infrastructure and services that reflected the specific needs in the communities served. The expenditure was R12.4 million; the Mbazwana Depot/Library costs had risen by R4 million since its inception. It was due for completion at the end of July 2011. Outcome 4 was to improve staff capacity at urban and rural libraries. The province had appointed five cyber cadets, five family literacy staff and four mobile library unit staff. Outcome 4 was an improved culture of reading, and the number of additional readers in the rural communities provided was 924.

Ms Slater then gave an overview of 2010/11. The financial allocation was R43 million. The province had spent 95% of its original allocation and 119% of funding actually received. General infrastructure challenges included the late approval of buying procedures. There was also a lack of municipal compliance with reporting. The way forward was dedicated SITA support from March 2011, and an approved buying procedure. An administration clerk was appointed to monitor reporting. 

Discussion
Mr De Beer commented that the province was doing a very good job with the cognisance that more academic texts were needed, as books in most libraries were outdated.

Mr Makhubela asked whether the migration to new automated library systems would be a threat to non-automated libraries. 

Ms Slater replied that most libraries were in the process of having automated systems. This system automated the scanning of date sheets instead of using a date stamp. All libraries were included in the project and this process would be finalised by the end of the year.

A Member of the Portfolio Committee on Arts and Culture asked for the vacancy rate of the department.

Ms Slater replied that all funded vacancies were filled 100%, and those unfunded were almost at 100%.

National Department of Arts and Culture
Mr Puleng Kekana, Director, national Department of Arts and Culture, said that he had not prepared a presentation but would give a few comments regarding the overall performance of provinces. In 2006/07 a comprehensive audit was done of the Public Library centres across the country. The Department then became aware of the difficulties and the severe decline in skills within the library sector. Library and information services had become a small profession; therefore the ability to recruit competent and skilled staff was limited. The impact of this conditional grant in the profession was significant, but one of the major challenges remained that there was a lack of proper interest in the profession itself.

Mr Kekana noted that since the implementation of the grant, capacity building had improved. Marketing and promotion had to continue however. Staff from smaller rural areas had been found to move into larger cities and the rural areas had suffered to recruit professional staff. Provinces were advised to use at least 5% of their budgets towards recruitment and capacity building. The issue of infrastructure remained complex in the roll-out stages. A number of stakeholders needed to be involved to make this process smoother. Planning was a crucial component towards using this grant effectively. Planning had to take place before the contractors were on site for the building of new libraries.

The provinces had technical assistance from National Treasury to streamline the planning process. Mr Kekana advised provinces to call National Treasury for assistance if they got stuck with infrastructure projects. These provinces experiencing difficulties could amend their business plans at that point in time and the funds could be deviated to other areas such as the purchase of library materials, preventing under expenditure at the end of the financial year. Provinces had the responsibility to make the discretion whether municipalities were capable to roll out and manage certain infrastructure projects. With regards to monitoring and evaluation, the national department did visit provinces on a regular basis as well as doing the oversight of progress on certain building sites.  

The meeting was adjourned.





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