Adjustments Appropriation Bill 2011: submissions by Depts of Basic Education; Cooperative Governance; Agriculture; Communications; Women, Children & People with Disabilities; Water Affairs

Standing Committee on Appropriations

15 November 2011
Chairperson: Mr E Sogoni (ANC)
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Meeting Summary

The Department of Basic Education reviewed spending as at the end of the second quarter and spending on infrastructure. Expenditure in the first six months was R6.426 billion or 45.6% of the adjusted appropriation. Figures were given for the adjusted appropriation against end of second quarter expenditure per programme and per economic classification, earmarked allocations/transfers over 2011/12 by services, and main appropriation against adjusted appropriation by programmes. The total allocation for the Department increased by 1.53% from R13.868 billion in the main appropriation to R14.080 billion in the Adjusted Estimates. Included in the R14.080 billion were transfer payments to the National Student Financial Aid Scheme (3.19%), conditional grants to provincial education departments (76.25%), and other transfers and subsidies (0.21%). The specifically and exclusively appropriated School Infrastructure Backlogs Indirect Grant (4.97%) represented the bulk of the payments for capital assets. The balance of the Adjusted Estimates consisted of earmarked funds, including workbooks for literacy and numeracy and the Kha Ri Gude Mass Literacy Campaign (11.47%) as well as compensation of employees, payments to examiners and moderators, projects and operational expenditure (3.91%). An overview of the adjusted estimates of national expenditure allocations for 2011/12 by programmes was provided. Under total infrastructure spending as at 30 September 2011, the second quarter spending was 43% of the total budget. The Eastern Cape was the lowest spending provincial department with a reported spending of only 18% instead of 50%.

While the sector had attained an average of 43% (instead of 50%), some provinces might over-spend while others might under-spend. Interventions and measures to improve spending were indicated at length. These included monitoring of projects, Procurement/Supply Chain management, and a planning and design manual. The Department had established a Project Support Unit within the Department to monitor the implementation of infrastructure and services provision by the various Professional Service Providers and Implementing Agents that the Department of Basic Education and provinces were utilizing for the implementation of the infrastructure programme. Standardising school designs had been finalised and a school infrastructure costing model had been developed and would be released to provinces. Progress on the accelerated schools infrastructure delivery initiative and on the Inappropriate Structures 2011/12 Programme was reported. The appointment of contractors for the 50 schools was progressing. The Development Bank of Southern Africa was constituting the evaluation committee with Department representatives and the evaluation process had been concluded. Progress on the Water and Sanitation 2011/12 Programme was reported. In the Eastern Cape, Mvula Trust had awarded 18 projects to contractors and 32 additional projects would be awarded to contractors by 14 November 2011. An additional 50 inappropriate schools in the Eastern Cape and 100 schools from other provinces would also be implemented in the 2012/13 financial year. Eradication of the basic services backlog was targeted in the 2012/13 financial year. A criterion was being developed to identify schools which required libraries, laboratories and administration block. Twelve schools per province were targeted. The balance of inappropriate schools would be eradicated in 2013/14. The escalation in the cost of school infrastructure was now a big problem.

An Inkatha Freedom Party Member could not envisage achieving equal access to education while there were such disparities in the provision of infrastructure. Perhaps there was collusion between the major service providers when tendering. He criticised the long delays and costs in the tendering process. Perhaps there was need for more interventions of the kind in the Eastern Cape. He called for a fuller engagement with the Department early the next year and noted that 20% to 30% of the national budget was on education. It was sad if the minister concerned was not attending the interviews for the selection of deputy directors-general. A Democratic Alliance Member thought that provincial departments were often unwilling to engage with national departments. African National Congress Members asked if the schools in the bidding process were ready and the teachers appointed; were dismayed that tenders awarded were way above the cost per metre, not only be for buildings but for furniture; commended the Department for the manner in which it worked with the provinces, but unless the accounting officers were committed to cooperative government did not hold out much hope for the Department's infrastructure. A Member of the Congress of the People noted a tendency to create structures to deal with problems rather than deal with it at the highest level, asked if the morale of teachers would improve, and if there were cartels operating in the pricing aspects of the building industry. The Chairperson asked if Section 43 of the PFMA was taken into account on the virements.

The Department of Cooperative Governance and Traditional Affairs gave figures for roll-overs, unforeseeable and unavoidable expenditure, adjustments due to significant and unforeseeable economic and financial events, declared savings, and virements. Figures were given per programme – administration, policy, research and knowledge management, governance and intergovernmental relations, disaster response management, provincial and municipal government systems, infrastructure and economic development, and traditional affairs. R5.6 million had been rolled over to implement 18 committed sites for the Community Worker Programme. R266.3 million was granted to the Department as a new transfer payment to the Municipal Councillor Pension Fund. R3 million was surrendered to the National Treasury as a contribution to the National fiscus by way of efficiency savings. The Department gave explanations, which included the low expenditure of 39.9%, as due to work that was previously done by consultants and which was now being done in-house after employing skilled officials during restructuring. The shifting of R38.4 million was because when the Siyenza Manje programme was transferred to the Department the process of creating the new Municipal Infrastructure Support Agency was not yet finalised and National Treasury proposed that 20% could be shifted to current expenditure for the continuation of the programme.

Members asked if the matter of money transferred to the South African Local Government Association had been resolved; what motivated the Department to bend the rules; why, in the first place, the Department had budgeted for so many consultants; and asked for further engagement. It was refreshing for the Director-General to be frank.

The Department of Agriculture, Forestry and Fisheries responded to the Committee's concern that the Department had spent 42.7% of its budget at the end of the second quarter 2011/12 while requesting a roll-over of R37.5 million. The Department gave reasons. The Department had shifted 9.8% of the adjusted budget, a violation of Section 43 of the PFMA but responded that it had made virements between programmes in terms of the provision of Section 43(2). The Department explained that the target set for the new jobs created in agro-processing per year would not be met, as the agro-processing sector had lost 17 000 jobs between the end of March 2011 and the end of June 2011 due to the state of the economy. The slow progress in the grouping of smallholders into community associations and cooperatives was because procurement systems were still in the process of being set up. The number of smallholder farmers to be settled should pick up in the second half of the financial year. The Department agreed that Section 43(4)(c) of the Public Finance Management Act did not authorise the utilisation of a saving in an account appropriated for capital expenditure in order to defray current expenditure. However capital funds were shifted between main division of the vote. An amount was shifted in programme 5 to payment of capital assets. The Department gave reasons for over/underspending against the target for the quarter of 25%.

Members asked about the state of the fisheries; were concerned at job losses; why the Comprehensive Agricultural Support Programme money was being rolled over; about the Department's role in maintaining the border fence and the Department's cooperation with other departments; believed that the Department had over-budgeted for rental on forest land and payment for capital assets year-in and year-out; asked the reason for the virements; and noted that Administration had more funding than the core programmes.

The Department of Communications presented its financial performance as at 30 September 2011 and the measures instituted to increase expenditure. Figures were presented for the 2011/12 budget versus expenditure per economic classification and programme, together with monthly expenditure figures for the first and second quarters of 2011/12. Figures for transfers and subsidies to state-owned enterprises were provided, with reasons for under-expenditure. Information on roll-overs with details of amount and description, and purpose for spending the money and time-lines was provided. Reasons for under-spending on transfers to entities was provided. Reasons for under-spending of ring-fenced funds were given. The Department's position as to budget versus expenditure as at 31 October 2011 by economic classification was stated. Corrective measures were indicated, including the reconstitution of the Tender Committee to ensure that projects were speedily implemented. Spending in the Department was gradually increasing as evidenced in the 31 October 2011 expenditure report, which reflected 36% expenditure.

Members asked about the roll-out of postal outlets in previously marginalised neighbourhoods; how the National Treasury had approved the 112 Emergency Call Centre through a private public partnership; how the Department would meet the deadline for implementation of digital terrestrial television broadcasting; found the use of percentages and the lack of line-performance targets unacceptable. The Department was to give its responses urgently in writing to those questions that it could not answer satisfactory.

The Department of Women, Children and People with Disabilities presented on the overall expenditure analysis for 2011/2012, expenditure per programme and per economic classification. It gave an overall expenditure analysis April to October 2011 by economic classification. Separate expenditure analyses were provided for each economic classification by programme for the same period. Travel and subsistence was one of the major cost drivers. The Department was monitoring spending on a weekly basis.

Members observed that the Department was a little low with its overall spending and the Committee was worried. The other concern was the capital budget. The device of shifting resources was over-used. One would like the budget at least to have an element of credibility. Members questioned a leave gratuity; were concerned with the amount of money used in administration rather than in the Department's core mandate; and warned the Department that if it overspent, National Treasury would not bail it out and the Department would be worse off next year. Members thought travel and subsistence expenditure was too high and could not believe that expenditure of R7 million in seven months could be justified. Neither were they satisfied with the Department's telephone expenses. An ANC Member accused the Department of using labour brokers.

The Department of Water Affairs explained under-expenditure at the end of the second quarter at 30.3% instead of the 50% benchmark. The reasons included slow filling of vacant posts as well as the Occupational Specific Dispensation, the late submission of invoices by big service providers, the Accelerate Community Infrastructure Programme, delays in implementation of the Masibambane projects, delays in the transfer of funds to municipalities, and delays in regional bulk infrastructure projects. The Department explained its request for a roll-over amount of R145.8 million despite the under-expenditure, and the shifting of funds from the transfer budget (8.6%) in Programme 3 to fund capital projects which was a violation of Section 43(4)(c) of the Public Finance Management Act. The funds were shifted because an amount of R203 million for the construction of the Nandoni Dam pipeline was erroneously allocated to Programme 3 (infrastructure) in the Estimates of National Expenditure instead of allocating it to Programme 4 (regional management). This error was communicated to the National Treasury - hence the shifting of funds to correct this error and to ensure the true reflection of reporting.

Members complained that the Department had failed to report on six or seven of its key targets as required by the Public Finance Management Act. Members pointed out the profound problems of raw sewerage in rivers, including the Berg River, and that this problem was affecting South Africa's exports. It was an untenable state of affairs. A Member of the Congress of the People asked if the Department had a plan for its staff structure and could not understand how it took a year to fill a position. The Chairperson, on the basis of an earlier Human Sciences Research Council briefing, said that there were many science graduates who could not find jobs. On that basis the Committee found it hard to understand the Department's reasons for taking so long to fill positions. The Chairperson demanded an outstanding report from the Department by 23 November.

Meeting report

Department of Basic Education presentation
Mr Bobby Soobrayan, Director-General, Department of Basic Education (DBE) reviewed spending as at the end of the second quarter and spending on infrastructure:

Spending as at the end of the second quarter
Adjusted appropriation against end of second quarter expenditure for 2011/12 per programme: Expenditure in the first six months of 2011/12 was R6.426 billion or 45.6% of the adjusted appropriation (table, slide 4).

Adjusted appropriation against end of second quarter expenditure for 2011/12 per economic classification (table, slide 5).

Details of earmarked allocations/transfers over 2011/12 by services (tables, slides 6-8).

Main appropriation against adjusted appropriation for 2011/12 by programmes: The total allocation for the Department increased by 1.53% (R0.212 billion) from R13.868 billion in the Main Appropriation to R14.080 billion in the Adjusted Estimates. Included in the R14.080 billion were transfer payments to the National Student Financial Aid Scheme (NSFAS) (3.19%), conditional grants to provincial education departments (76.25%) and other transfers and subsidies (0.21%). The specifically and exclusively appropriated School Infrastructure Backlogs indirect grant (4.97%) represented the bulk of the payments for capital assets. The balance of the Adjusted Estimates consisted of earmarked funds, including workbooks for literacy and numeracy and the Kha Ri Gude Mass Literacy Campaign (11.47%) as well as compensation of employees, payments to examiners and moderators, projects and operational expenditure (3.91%). (Table, slide 9).

Overview of the adjusted estimates of national expenditure allocations for 2011/12 by programmes (tables, slides 10-11).

Spending on infrastructure
Total infrastructure spending as at 30 September 2011: The second quarter spending was 43% of the total budget. The Eastern Cape (EC) was the lowest spending department with a reported spending of only 18 % against an expected spending of 50% as at the end of the second quarter (table, slide 13).

Second quarter spending analysis. Gauteng had reported a spending of 40%: This was an improvement on the expenditure reported at the end of the first quarter. However this was not a satisfactory indication of improvements in spending as the 3rd and 4th quarter projections were very high and might not be achieved as indicated.

Mpumalanga and Limpopo had reported over- spending as at the end of the second quarter of 83% and 67% respectively. This was a clear indication that these provinces would significantly over- spend their total infrastructure budget by the end of 2011/12.

Given these indications, it became apparent that while the sector had attained an average spending of only 7% below the expectation of 50% at the end of the second quarter, there were those departments that would significantly under- spend while others would significantly over-spend (slide 14).

Education infrastructure grant (EIG) as at 30 September 2011: 50% of the EIG had to date been transferred to Provincial Education Departments (PEDs). The Eastern Cape, Free State, Northern Cape, and Western Cape had spent less than the below 40% of the 50% that had currently been transferred. The fourth transfer was due on 18 Nov 2011. (Table, slide 15).

Intervention to improve spending in 2011/12: 2011/12 posed an immediate challenge to the sector to implement interventions to manage current spending. As mentioned some PEDs might over- spend while others might under-spend. The following was monitored to assist provinces: Effective supervision and oversight in the planning process to ensure that correct needs are identified and addressed; alignment of planning and budgeting; adherence to project management principles, including monitoring of projects; capacity/skills; and Procurement/Supply Chain management (slide 16)

Measures to improve spending: The sector was experiencing significant challenges with planning and capacity to plan at the provincial level. The following were actions taken by DBE to assist PEDs address these planning and capacity challenges. DBE had developed an Action Plan to address identified gaps in the planning process of PEDS. This plan identified actions that needed to be taken by PEDs and DBE to address these planning challenges. A planning and design manual had been developed and all infrastructure personnel would receive training based on the manual.

A Short Term Technical Assistant Team had been appointed to look at the User Asset Management Plans of PEDs to assist them to develop comprehensive plans and project lists. The team would also be responsible for developing tools to assist PEDs improve infrastructure planning. DBE had established a PSU within the DBE to monitor the implementation of infrastructure and services provision by the various Professional Service Providers (PSPs) and Implementing Agents (IAs) that the Department of Basic Education and provinces were utilizing for the implementation of the infrastructure programme (slide 17).

More interventions to improve spending in 2011/12: The PSU would also be responsible to continuously track progress on projects; inspect work in progress and in completed projects to evaluate quality of work as well as monitoring expenditure per project on a monthly basis. Increased monitoring planning, budgeting , expenditure, project management and procurement issues were interrogated and a sample of projects were visited. Based on the findings from these visits, remedial actions were devised with the province and monitored by the DBE. The DBE was working with the IDIP to develop an human resources (HR) strategy to address capacity constraint with regards to infrastructure in PEDs. The strategy was at an advanced stage.
Training was planned on infrastructure procurement and the gateway process as articulated in the Construction Industry Development Board (CIDB) tool-kit. This would include officials in the supply chain units in provinces (slide 18).

The following had also been carried out to improve planning and implementation:
▪ Conclusion of guidelines for infrastructure planning and these would be implemented in provinces;
▪ Upgrading and updating the National Environmental Information Management System (NEIMS) database to ensure accurate data for planning;
▪ Finalising the infrastructure planning and prioritization model;
▪ Standardising school designs had been finalised and would be released for use in provinces; and
▪ A school infrastructure costing model had been developed and would be released to provinces to assist with preliminary costing for projects (slide 19).

Progress on accelerated schools infrastructure delivery initiative (ASIDI)
Progress on Inappropriate Structures 2011/12 Programme: Development Bank of Southern Africa (DBSA): The PSU had been appointed and it assumed duty on 27 September 2011. Appointment of contractors for the 50 schools was progressing as per the table below. Approximately 400 BIDS were sold and 150 BIDS were returned. The evaluation committee was being constituted by DBSA with DBE representatives and the evaluation process had been concluded. The adjudication committee met on 14 November 2011 (slide 21).

Progress on Water and Sanitation 2011/12 Programme EC: Mvula Trust: The Mvula Trust had awarded 18 projects to contractors and 32 additional projects would be awarded to contractors by 14 November 2011. The table below indicated the projected site handover dates as well as anticipated completion dates (table, slide 22).

Progress on Water and Sanitation 2011/12 Programme: Independent Development Trust (IDT) and progress on Electrification 2011/12 Programme: Eskom: The Memorandum of Agreement (MOA) with IDT was in the process of being finalised. 27 schools in the North West had been assessed. The MOA with Eskom had been signed. 155 projects were in the planning process throughout the country. The projects' cost was estimated at R66 million (slide 23).

Progress on Water and Sanitation 2011/12 Programme: KwaZulu-Natal (KZN): KZN started with the planning process on the 30 August 2011 and was in the process of implementing 79 projects,
32 of the projects were in planning stage and 47 were in the tender stage (table, slide 24).

Progress on Water, Sanitation and Electrification 2011/12 Programme: Free State (FS): The Free State appointed a Project Manager on the 17th August 2011. It was in the process of implementing 38 projects for water, 14 for Sanitation and 31 for Electrification. The time lines were as indicated in the table. The projects were estimated at R22million (table, slide 25).

Planning 2012/13 and 2013/14 : ASIDI: An additional 50 inappropriate schools in the Eastern Cape and 100 schools from other provinces would also be implemented in the 2012/13 financial year. The
PSU would begin with the scoping to this effect and to conclude by mid-December. Eradication of the basic services backlog was targeted in the 2012/13 financial year. A criterion was being developed to identify schools which required libraries, laboratories and administration block. Twelve (12) schools per province were targeted. The balance of inappropriate schools would be eradicated in 2013/14 (slide 26).

Mr Soobrayan said that the Department was making progress in filling vacancies, but the positions of deputy directors-general remained unfilled because it had not been convenient for the Minister to attend the selection interviews for these positions. He commented on the roll-over of R6.995 million for specialised computer services required for the learner records project. He commented on the aggregate figures. Some provinces had done the right thing. The average seemed fine, however, given these indications some would overspend.

Infrastructure spending was not even. Sometimes it rose very sharply and raised alarm bells for the alignment of planning. The Department had repeatedly confronted this problem. The Department had instituted measures to intervene if a province was non-compliant with a conditional grant.

Besides establishing the programme Projects Support Unit (PSU) and developing a school infrastructure costing model, the Department was working closely with the Auditor-General (AG) and was upgrading its information systems.

The escalation in the cost of school infrastructure was now a big problem and could not justify the input costs of building a school. In some cases the cost per square metre for building a classroom was more than the cost per metre for building a house. This was strange as a house required more complex material than a school classroom.

Discussion
Ms N Mkhulusi (ANC) asked if the Department could quantify the savings and questioned the shifting of funds. She understood that the funds had been shifted on the main division far more than the 8% allowed by the Public Finance Management Act (PFMA). She wanted to know if that shift had been approved. Some funds had been shifted because of incorrect classification. She asked if the Department was not setting itself up for a situation of not being able to achieve its targets. She also asked about Grade R.

Mr N Singh (IFP) could not envisage achieving equal access to education while there was such a big difference in the provision of infrastructure, including libraries and water. He asked if there was not some collusion between the major service providers when tendering. Who were the major contractors? He asked about the relationship of the Department of Public Works to the Department of Basic Education and criticised the long delays in the tendering process. In KwaZulu-Natal it had been possible to have classrooms built for R60 000 or R70 000, while the Department of Public Works would charge R250 000 per classroom and take five times as long as a local provider. How long did it take to build a school? The same question applied to refurbishment (slides 6 and 7). The Deputy Minister of Finance had said that National Treasury was going to monitor closely the spending of conditional grants. While that might be good for the transfer of funds, perhaps there was need for more interventions of the kind in the Eastern Cape.

Mr M Swart (DA) noted that building costs were coming down, but the costs of building schools was going up. Maybe there was need for another audit. The increase of R13.796 million in Programme 2 was due mainly to the roll-overs of R12.048 million in respect of the Technical Schools Recapitalisation conditional grant (table, slide 10). He noted that Skills development must be implemented correctly in technical schools.

Dr P Rabie (DA) asked about the reporting of provincial departments and contact with them. There appeared to be a turf war and provincial departments were often unwilling to engage with national departments. The present situation was untenable. People in the street were battling.

Mr J Gelderblom (ANC) was concerned that unemployment was very high in the Eastern Cape. He asked what was set aside for the maintenance of schools, and what the position was for January 2012. Would the schools in the bidding process be ready on time and the teachers for them identified and appointed? Would there be schools that would open without equipment and what was the budget for this? What about the sanitation? He asked if the new schools all had electricity and computers (slide 21).

Mr G Snell (ANC) congratulated the Department on its handling of the infrastructure plan. He wanted analysis on the awarding of bids. The lowest bids were not being taken. Tenders awarded were way above the cost per metre, not only be for buildings but for furniture. He commended the Department for the manner in which it worked with the provinces, but unless the accounting officers were committed to cooperative government he did not hold out much hope for the Department's infrastructure. How could the Department enforce provincial compliance?

Mr L Ramatlakane (COPE) was not sure that the picture would be different if the Department was tasked to perform those functions that the provinces could not perform. It was an issue of leadership. South Africa was a unitary state, so one could not just blame the provinces. A quality output was needed. This action plan, this 'Marshall Plan', was an urgent task. There was a tendency to create structures to deal with the problem rather than deal with it at the highest level. He asked about the issue of the performance of expenditure. The Eastern Cape had been mentioned. He asked with reference to sanitation, water and electricity. The work function was not being performed.

He asked if the morale of teachers would improve. If a grant had not been performing well, it had to be asked what the problems with it were. With regard to this earmarked funding, there seemed to be a rush to put the money somewhere. What was to be done to solve the problem of the Eastern Cape. He had asked the Deputy Minister the previous day if the Department was having an integrated provincial forum.

He asked if there were cartels operating in the pricing aspects of the building industry.

The Chairperson asked if Section 43 of the PFMA was taken into account on the virements. He asked about the inappropriate structures project given to the DBSA to run (slide 21). He congratulated the Department on the appointment of Ms Diali and the establishment of the ASIDI. Experience had shown that the provinces had not been able to do it. Clearly everyone must comply and there had been improvement. Perhaps this office was a move in he right direction for education. He asked how one could ensure that with the money allocated one would be able to achieve the building of these schools. Maybe it was a first step. In the Eastern Cape things were happening. Was one really powerless? The PFMA did not say that one was powerless.

Mr Singh called for a fuller engagement with the Department early the next year when this unit was up and running. 20% or 30% of the budget was on education. It was sad if the Minister was not attending the interviews for the selection of deputy directors-general.
 
Mr Soobrayan did not have evidence to suggest collusion but the facts indicated that there was an unusual escalation of costs. The action plan spoke to specific intervention targets. When the Department returned it would talk about it. Next year would be an appropriate time. The Department had a steering committee on provinces. In addition there was a committee of heads of department. The PSU was not adding layers, but would provide stronger national oversight. The point about cooperation was important, and the Department tried very hard.

Ms Ntsetsa Molalekoa, Chief Financial Officer (CFO) replied that the saving and shifting of funds were still within the same programme. The Department had remained within the required percentages. Funds were shifted from the units which did not exist any more. All the other items remained the same.

Mr Paddy Padayachee, Acting Deputy Director-General (DDG): Planning, DBE, replied on the 28 schools put out to tender by the DBE. The 22 would also be out to tender in December.

The Chairperson asked Mr Padayachee how many schools of those 50 had been built?

Mr Padayachee replied 'None'.

Mr Soobrayan said that none had been constructed yet, but the DBSA had said that it would be possible in the time frame and the Department hoped for completion within the financial year. It had tried to carry out the projects in areas where there was need of job creation. The Department could provide details in writing. These were the dates that were feasible.

Mr Singh asked for a presentation on the PSU.

Mr Ramatalakane asked what the cost per unit was.

Mr Soobrayan said that only people who could work in festive season could put in bids. Completion of those 50 schools was expected by the end of March.

Mr Snell believed that the Department was sincere but it should not be mislead by the DBSA. Since the Department had brought in its internal capacity it should use it to analyse the situation.

Mr Soobrayan said that the discussion had been very useful. The time-frames had been tight. The Department would work with DBSA to ensure delivery happened on time and would communicate further in writing.

The Chairperson noted a number of omissions but hoped that the Department's own infrastructure unit would help.

Mr Singh noted that there would be a hearing on the report of the Auditor-General on the performance audit of the infrastructure delivery process at the provincial departments of education in the Standing Committee on Public Accounts (SCOPA) on 22 November 2011.

Department of Cooperative Governance and Traditional Affairs presentation
Ms Lerato Thwane, Executive Manager: Finance, Department of Cooperative Governance and Traditional Affairs (COGTA) gave figures for roll-overs, unforeseeable and unavoidable expenditure, adjustments due to significant and unforeseeable economic and financial events, declared savings, and virement (slide 4). Figures were given per programme – administration, policy, research and knowledge management, governance and intergovernmental relations, disaster response management, provincial and municipal government systems, infrastructure and economic development, and traditional affairs. R5.6 million had been rolled over to implement 18 committed site for the Community Worker Programme (CWP). An amount of R266.317 million was granted to the Department as a new transfer payment to Municipal Councillor pension Fund. R3 million was surrendered to the National Treasury as a contribution to the National fiscus (slide 5). The Department gave explanations, which included the low expenditure of 39.9% as due to work that was previously done by consultants and which was now being done in-house after employing skilled officials during restructuring. The R266.317 million allocated to the Department during the Adjusted Estimates was not the result of a request for a roll-over but for unforeseeable and unavoidable expenses occasioned by paying councillors who were not returned in the 18 May 2011 elections as a once off gratuity. The shifting of R38.4 million was because the Siyenza Manje programme was transferred to COGTA, the sole intention was to create an entity called Municipal Infrastructure Support Agency (MISA) but since the process of establishing a new entity was not yet finalised National Treasury proposed that 20% could be shifted to current expenditure for the continuation of the programme. National Treasury requested departments to declare efficiency savings back to the fiscus and the Department was able to reprioritise and surrender R3 million (slide 6). Figures for transfers and subsidies were given (table, slide 7) together with notes on expenditure on transfers and subsidies (slide 8). The Department noted that Equitable Share, Municipal Share, Municipal Infrastructure grants transfers were made according to their cash flow with the exception of Municipal Systems Improvement Grant (MSIG) grant where only 71% was transferred due to 14 municipalities' grants being withheld due to non-compliance. For MISA the Department had recently signed a contract with the Development Bank of Southern Africa (DBSA). The contract entailed that all procurement processes would be done by the DBSA except for certain listed items; the first payment of R49.1 million had been paid over to DBSA. Transfers to Uganda Local Government Association (ULGA) were still under management consideration in consultation with the Executive on the best manner to disburse the allocation.

Ms Thwane explained the gratuity for pensions, and other matters. This was what National Treasury had allocated additionally to the Department during the time of the adjustment budget on account of challenges experienced.

In its delivery agreement with the Minster the Department had agreed that it would do some cooperatives that were ward-based but the Department did not have the funds available for those projects so then the management decided and R17 million was moved from other areas into that programme and that would boost the Department's expenditure going forward.

As to the adjusted estimates and those virements that the Department had moved. This was where the Department had made cuts and could fund that programme, and it had given back funds to the national fiscus. The explanations were on page 6. The Department was a little bit behind.

In terms of the deviation, when the Department had drawn up the budget it had done so on the basis that the information technology (IT) was outsourced. Thus the Department had a surplus fund when it found that it could do the IT work within the Department so R3 million came from the IT project for which the Department had National Treasury approval.

As to the special purpose vehicle that was created, the Department thought that it would have an entity so National Treasury put that money under transfers but then the Department found that having an entity would be difficult so the funds initially were allocated to the DBSA so the Department requested National Treasury to move them from transfers to goods and services, so the Department was working with the DBSA while establishing the entity. The Department was sitting at 40%. So the Department tried to make transfers linked to the municipalities. Those ones were in place. For the municipal systems and improvement grant, because of some compliance issues the Department would request an additional approval for the Department had signed that contract with the DBSA. The Department had paid now.

Discussion
Mr Swart referred to table 4, slide 7 - transfers and subsidies.

Mr Singh asked the Department if it could provide a list of those cities at which programmes were being conducted in these 18 centres. He asked if the matter of money transferred to the South African Local Government Association (SALGA) which had received a very unfavourable audit report, had been resolved.

Mr Ramatlakane asked what motivated the Department to bend the rules. The current expenditure showed a strange way of shifting funds.

Ms Mashigo asked why, in the first place, the Department had budgeted for so many consultants. She asked what was the percentage of funds shifted, and if this shift was compliant with the PFMA.

The Chairperson commented on the consultants and referred to slide 7. He observed that the Municipal Infrastructure Grant (MIG) was another very important programme. He was confused about the level of monitoring and requested a report on the MIG. He noted spending at 28% - but spending on what? How could the Department account for its return to the DBSA.

Prof Charles Nwala, Director-General, Department of Traditional Affairs (DTA), replied that he was taking notes so that Mr Elroy Africa, Director-General, Department of Cooperative Governance (DoCG) / COGTA could look at them and make sure that they were responded to. As to the credibility of the budget one was living in times of a difficult situation in the economy.

Mr Ramatlakane asked if Mr Africa was coming back. His question had not been answered.

Mr Elroy Africa, Director-General, Department of Cooperative Governance (DoCG) / COGTA, after returning from a meeting of the Cabinet, replied to Members' questions asked earlier.

The Municipal Infrastructure Support Agency (MISA)
The Department was finalising the institutional forms. It was part of the global allocation. In summary that was where the Department was with MISA. It would love to have it finalised, but it had entered into a MOU with the DBSA and that was why the Department had transferred money to DBSA. That was the Department's estimation. The initial amount excluded the wage costs.

Fraud
As of this year the Department was establishing an anti-corruption inspectorate. This inspectorate was already doing work on the ground. The Special Investigating Unit (SIU) had a blanket mandate to undertake investigations in the North West in particular.

The annual report of under-expenditure on donor funding
The Department had a challenge of under-expenditure on donor funding. For the last 12 months there had been an extensive restructuring exercise. So the Department could not enter into the commitments and was trying to secure funding.

Audit
The Department's view was definitely that the audit had been a setback. The only reason for the qualification was non-disclosure. The Department had a post-audit action plan, and Mr Africa had consulted the Accountant-General, National Treasury.

Shifting of funds
The Department agreed that its shifting of funds went beyond the 8% allowed and the main reason that the Department had offered to the National Treasury was the management of the IT work in the Department which previously was outsourced. However, the Department had managed to make use of some of its own resources to do the work.

Statistics on service delivery
Mr Africa provided statistics.

Terminology
The Department should have given greater precision.

Virements
Information and Communications Technology (ICT) was one example.

Adjusted budget
The Department now had a total budget of R47billion. It would need to do the calculation but could not do it now.

Cooperatives
Cooperatives were captured in the Department's delivery agreement and the Department had linked the two - hence the virement exercises of shifting funds in the Department.

Conditional grants
The biggest conditional grant was the MIG.

Mr Ramatlakane asked for further engagement. It was refreshing for the Director-General to be frank. In that way Members obtained much more. Mr Africa had provided a lesson to other officials in frankness.

The Chairperson agreed that it was necessary to be open with each other.

Department of Agriculture, Forestry and Fisheries presentation
Mr Johan Venter, Director: Budgets and Reporting, DAFF, referred to the Department's written submission and reported that the Department had spent 42.7% of its budget at the end of the second quarter 2011/12. This notwithstanding, the Department had requested a roll-over of R37.5 million. The Department gave reasons as per the Department's comments document, paragraph 1. The Department had shifted 9.8% of the adjusted budget, a violation of Section 43 of the PFMA. The Department explained that it had made virements between programmes in terms of the provision of Section 43(2) of the PFMA (table, paragraph 2). On progress on trade promotion which had a target of 35 567 new jobs in agro-processing, the Department explained that the target set for the new jobs created in agro-processing per year would not be met, as the agro-processing sector had lost 17 000 jobs between the end of March 2011 and the end of June 2011. This was due to the state of the economy and was beyond the Department's control (paragraph 3). The Department's reason for the slow progress in the grouping of smallholders into community associations and cooperatives was that the number of new smallholding farmers established in the first half of 2011/12 was less than half of the estimate for the whole year because procurement systems were still in the process of being set up. The number of smallholder farmers to be settled should pick up in the second half of the financial year (paragraph 4). The Department agreed with the Committee that Section 43(4)(c) of the PFMA did not authorise the utilisation of a saving in an account appropriated for capital expenditure in order to defray current expenditure. The Department did not utilise funds allocated for capital expenditure to defray current expenditure; however capital funds were shifted between main division of the vote. An amount was shifted in programme 5 to payment of capital assets (paragraph 5).

The Department gave an analysis of expenditure trends per programme and per economic classification in the first quarter 2011/12 and reasons for under/over-spending against the 25% target:

▪ Programme 1
Double payment was made to the Agricultural Research Council (ARC) in April 2011
▪ Programme 2
The implementation and spending plans for the Primary Animal Health Care Programme was in process.
▪ Programme 3
Quarter 1 payment for conditional grants to provinces were paid at 10% of the appropriated amount
▪ Programme 4
Once-off payment to the National Agricultural Marketing Council (NAMC) in April 2011
▪ Programme 5
Funds in respect of the Prevention and Mitigation of Disaster Risks were committed for the latter part of the financial year after promulgation of the AENE

The Department gave an analysis of expenditure trends per programme and per economic classification in the second quarter 2011/12 and reasons for under/over-spending against the 25% target:

▪ Programme 1
Double payment was made to the ARC in April 2011.
▪ Programme 2
Unforeseeable and unavoidable expenditure in respect of the combating of animal diseases provided for in the AENE to be expensed after promulgation of the AENE.
▪ Programme 3
Quarter 2 payment for conditional grants to provinces were paid at 20% of the appropriated amount.
▪ Programme 4
Rolled-over funds for Farmer Register Project provided for in the AENE to be expended after promulgation of the AENE.
  Programme 5
Funds in respect of the Prevention and Mitigation of Disaster Risks and Agricultural Disaster Management Grant provided for in the AENE to be expended after promulgation of the AENE.

Expenditures in the first and second quarters were summarised per programme (slides 5 and 6).

Discussion
Mr Gelderblom said that when it comes to export it was all about the quality of the product. Our research would play a tremendously important role in the future. As to food security and the new farmers, he asked if the Department had made available any provision for mentorships. He was not sure if there was a data base. He asked about the success with mentorships. There was a high focus on existing farmers. He sought some clarity on the loss of jobs. He was not happy with this answer. He asked about the situation with the fisheries. He asked about the research units - why was there not one in the Free State and Limpopo because they could create jobs in fresh water agriculture. He knew that the Department's money was not enough and that the Committee must fight for this Department. The National Planning Commission had announced that more than a million jobs could be created in agriculture, but there was a loss of jobs. He was fighting for the rural areas.

Mr Langa Zita, Director-General, Department of Agriculture, Forestry and Fisheries (DAFF) undertook to respond in writing.

Mr Swart referred to slide 6 and asked about the low spending on rent and land and why there was such low spending of a high budget and with 11% expenditure only since that was where one could create jobs.

Ms Mashigo asked why Comprehensive Agricultural Support Programme (CASP) money was being rolled over.

The Chairperson asked about the Department's role in maintaining the border fence and the Department's cooperation with other departments.

Mr Zita replied that the Department wanted to give support for mechanisation and access to seeds and appealed to the Committee for help. There was a need for 3 000 tractors. The Department needed to assist any who could work on the land to do so, whereas the role of the Department of Rural Development and Land Reform was concerned with clinics. There were joint research projects with the Agricultural Research Council (ARC). The Department was trying to work out a research collaboration in a particular province. If the Department could bring that capacity it was evaluating the extent of research in commodity areas. It was all about applied research. It was a fundamental issue. It concerned commercial agriculture.

Mr Venter added that the Department had over-budgeted for rental on forest land and payment for capital assets year-in and year-out. The capital budget spending awaited the Department of Public Works. The Department was subject to the cooperation of public works. The reason for the virements was that the Department underwent a major restructuring process. As it progressed some under-funded programmes were identified.

The Chairperson said that other departments had programmes for transfers. It appeared that the administration had more funding than the core programmes.

Department of Communications (DOC) presentation
Mr Sam Vilakazi, DOC Acting Deputy Director-General: Finance and Development Enterprise, gave a presentation on the financial performance of the Department as at 30 September 2011 and the measures put in place to increase expenditure in the Department.

Figures were presented for the 2011/12 budget versus expenditure per economic classification and programme – administration, ICT international affairs and trade, ICT policy development, ICT enterprise development, ICT infrastructure development, and Presidential National Commission (table, slides 4-5, bar-chart [by programme only], slide 6).

Monthly expenditure figures for the first and second quarters of 2011/12 by programme were presented (table, slide 7).

Figures for transfers and subsidies to state-owned enterprises (SOEs) – such as the Independent Communications Authority of South Africa (ICASA), the South African Post Office (SAPO), the South African Broadcasting Corporation (SABC), Sentech, the New Partnership for Africa's Development (Nepad), the .ZA Domain Name Authority, and the Skills Development Levy - were provided, with reasons for under-expenditure (table, slide 8). Information on transfers and subsidies to SOEs was also presented in the form of a bar-chart, slide 9.

Information on roll-overs with details of amount and description, and purpose for spending the money and time-lines was provided (slide 10). The roll-over of R109.9 million for Sentech was for the purpose of Digital Terrestrial Television (DTT) capex and dual illumination. The funds would be transferred in December 2011. There were also roll-overs for automation of business processes and for service deployment of the e-Cadre programme.

Reasons for under-spending on transfers to entities was provided (slide 11). For example, SAPO's plans on how it intended to utilise the subsidy allocation were different from what the Minister of Communications had pronounced. SAPO had been requested to provide details on how it intended to roll-out the postal outlets committed by the Minister.

Reasons for under-spending of ring-fenced funds were given (slide 12). For example, the MOU with Sentech was to be completed by 18 November 2011 and ready for signature, and the funds could only then be transferred. The amount of the MOU was R85 million.

The Department's position as to budget versus expenditure as at 31 October 2011 by economic classification was stated (table, slide 13).

Corrective measures were indicated:
▪ process of filling vacancies in the Department had commenced and positions had been advertised in national papers.
▪ Departmental procurement plan had been developed and submitted to National Treasury.
▪ The Tender Committee had been reconstituted, and to ensure that projects were speedily implemented the committee sat every week. The Bid specifications and Bid Evaluation committees had been formalised.
▪ The internal controls had been put in place, including the review of finance policies and SCM delegations. (slide 14).

Results:
▪ Spending in the Department was gradually increasing as evidenced in the 31 October 2011 expenditure report, which reflected 36 % expenditure.
▪ R29.2 million of expenses which represented 8% of the Departmental operational expenditure (R370 Million) had been committed. Invoices were being received and processed for payment.
▪ Six Departmental flagship projects have been prioritised and are being implemented (slide 15).

The Chairperson required specific information.

Mr Vilakazi said that entities were requested to submit their draw-down schedule to ensure that entities were able to deliver on what they were supposed to do. The Department then had the approved drawings and the actual transfers.

The rest of the transfers were in line with the drawings. For Sentech not much was transferred. The rest of the transfers should be in order. The reason for the delay to the migration to digital standards was that the roll-out of infrastructure at Sentech was dependent on the adoption of standards and the information and communications technology (ICT) skills base.

The 112 emergency call centre was closed in 2009 and was now to be revived as a public private partnership (PPP).

The Chairperson had heard this story before.

Mr Vilakazi explained the corrective measures. One of the Department's problems was the fairly high vacancy rate due to realignment and people who left while the vacancies were never filled and this contributed to low expenditures. In line with the new practice note a tender committee had been reconstituted. The Department had internal controls. Expenditure in the Department was gradually increasing. The Department was currently processing quite a number of projects.
 
The Chairperson commended Mr Vilakazi for his optimism.

Discussion
Mr Swart asked for what financial assets the Department had paid.

Dr Rabie asked about the roll-out of postal outlets in previously marginalised neighbourhoods (slide 11).

Mr Snell asked how the National Treasury had approved the 112 Emergency Call Centre (ECC) through a private public partnership (PPP) (slide 12).

The Chairperson said that Mr Snell's question was very valid.

Mr Gelderblom asked how the Department would meet the deadline for implementation of digitisation since it was important for parliamentary services.

Ms Mashigo said that the use of percentages was not acceptable. There were many zeros and there was a lack of line-performance targets.

Mr Vilakazi explained the South African Post Office (SAPO) subsidy. There were new outlets in struggling areas. The Department had to call the management of SAPO but the matter had been resolved. First of all the emergency call centre had been moved to another location. There had been a transaction adviser.

The Chairperson asked if there was still a roll-over.

Mr Vilakazi replied that the Department had never asked for a roll-over. The Department would then want to engage the State Information Technology Agency (SITA) and the colleagues internally. The Department was not in a position to spend the money.

Mr Vilakazi said that the Department was more service-orientated. In October the expenditure had jumped. The former Minister of Communications had made a pronouncement on migration to digital modulation but Mr Vilakazi would not like to comment further. He would prefer to allow the Director-General to comment in the report.

The Chairperson said that only the Director-General could conclude. He requested the Department to please give its response urgently in writing to those questions that it could not answer satisfactory. The Committee wanted those answers by the following day at midday. The National Treasury must also provide clarity by the same time.

Department of Women, Children and People with Disabilities presentation
Dr Nonhlanhla Mkhize, Director-General, Department of Women, Children and People with Disabilities, apologised for the format of the presentation which might not be as expected. The presentation was on the overall expenditure analysis for the financial year 2011/2012; expenditure per programme and per economic classification.

An overall expenditure analysis April to October 2011 by economic classification – compensation, goods and services, transfers and payments, and capital expenditure – was provided (bar-chart, slide 3). A separate expenditure analysis was provided by compensation by programme for the same period (bar-chart, slide 4, table, slide 5). Goods and service expenditure for the same period was analysed by programme (bar-chart, slide 6, table, slide 7). Details of goods and service expenditure for the same period were given for all the programmes (slides 8-12). An analysis of transfer payments was provided (table, slide 13, notes, slide 14). Expenditure on machinery and equipment was analysed by programme (bar-chart, slide 15, table, slide 16).

The Chairperson observed that the Department was a little low with its spending and the Committee was worried. What were the challenges? How did the Department intend to address the underspending? The other part of the Committee's concern was the capital budget. It suspected that the device of shifting resources was over-used, and, while the Committee agreed with it since one could not be perfect in government, the Committee would like the budget at least to have an element of credibility.

Dr Mkhize said that travel and subsistence was one of the major cost drivers. The Department was transferring money to the Commission for Gender Equality (CGE) on a monthly basis. The Department was monitoring spending on a weekly basis. Some funds might have to be moved from goods and services.

Discussion
Dr Mkhize apologised for the communication breakdown on the Department's side and promised that this would not happen again. It was the Department's responsibility to update to its contact details. Failure to do so had caused the Committee's letter to be sent to a wrong fax number.

Mr Ramatlakane asked if the Department was projecting over-expenditure on certain aspects of its budget. The Department had had to carry over costs. He asked if the Department was anticipating a roll-over moving forward.

The Chairperson asked about the expenditure signed off by National Treasury – had the Department signed it off. The Department had been at 18.7 % at the end of September in the adjusted Estimates of National Expenditure (ENE) (56). In one month the Department's expenditure had apparently accelerated (bar-chart, slide 3). Which information was correct? Was the information published by National Treasury in the AENE correct? He thought that there would be a slide indicating that the Department's total budget was R143 million. Did the Department have that slide?

Dr Mkhize replied that the Department overall was, on 31 October 2011, at 54%

Ms Mashigo questioned the leave gratuity mentioned in slide 14.

Dr Mkhize said that the Department would identify critical posts and fill them in the financial year. The Department was declaring this because the shifting of funds was around machinery and capital expense expenditure. The Department had started from scratch and was anticipating that it might have over-expenditure so it had requested permission for National Treasury to shift funds from where there might be savings.

Ms Yengeni asked if the Department expected any roll-overs.

The Department replied that it did not expect any.

Ms Yengeni did not understand these figures and was concerned with the amount of money used in administration rather than in the Department's core mandate. She was concerned about the money paid to very different personnel agencies and contract workers. What was that amount of money? She could not understand why the Department used these agencies instead of employing people directly.

The Chairperson warned the Department that if it overspent National Treasury would not bail it out and the Department would be worse off next year. The Committee sympathised with the Department as it was new, but it should have negotiated with National Treasury for unforeseen expenditure.

Dr Mkhize said that the budget for the administration programme was high because the Department had centralised capital expenditure for compensation under administration. The Department was responsible for the Minster's office, the Director-General's office, and many chief directorates.

Ms Mashigo asked about goods and services especially travel and subsistence which were quite high.

Mr Ramatlakane asked who actually travelled so far in seven months to account for this kind of expenditure.

Dr Mkhize acknowledged that travel was a challenge. The Department had taken steps to reduce the number of people in delegations. However, since the Department was signatory to international instruments according to its mandate it was required to travel in order to report on how South Africa was performing on those instruments.

Mr Ramatlakane could not believe that expenditure of R7 million in seven months could be justified. How many people travelled? There was a need for travel but it had to be curtailed. A million a month was incredible. What happened to the money budgeted the previous year?

Ms Mashigo was not satisfied with the Department's Telkom expenses. If people worked in offices there should be a reduction in mobile telephone usage.

Ms Yengeni believed that the Department had not sent reports to the National Treasury but it should be able to tell the Committee, if not in detail, what its achievements over the six months were.

Dr Mkhize maintained that the Department had proof that it had submitted quarterly reports, signed off by the Minister, to the National Treasury. This was a serious matter for the Department.

Dr Mkhize said that another reason for the high administration budget might be the money for the contract workers. The Department had now done away with contract workers and replaced them with full-time employees. The Department was now building its own capacity.

Ms Yengeni asked how much was paid to each contractor. Moreover, she asked why the Department did not pay the contractors directly rather than through the agencies. She accused the Department of dealing with labour brokers. There was no way that use of labour brokers by a Government department could be condoned, for it was the highest form of exploitation of workers. Agencies should recruit staff, but no more. Payment must be made to the workers and not to the agencies. The Department must promise that this would not happen again.

The Chairperson said that this was a question that needed to be followed up.

The Department would response.

The Chairperson summarised that the point of cutting down on labour brokers was not to use them.

Dr Mkhize concluded by saying that the Department would submit its achievements and percentages. It would also submit an analysis of who had travelled.

The Chairperson asked the Department not to put itself into a corner, but rather just to try to reduce travelling or cut down on expenses.

Mr Ramatlakane wanted more details: he asked for a list of names. This was not confidential information.

The Chairperson did not want to ask who travelled. He preferred to deal in principles. He observed that National Treasury had also raised the matter with the Department.

Mr Ramatlakane felt so strongly about it that he would put it on the order paper.

The Chairperson said that Mr Ramatlakane was welcome to do so.

Department of Water Affairs response
Ms Nthabiseng Fundakubi, Acting Chief Financial Officer, Department of Water Affairs, reported that spending at the end of the first quarter was at 30.3% which was below the 50% benchmark.

The reasons for this under-expenditure were:
▪ the slow pace in the filling of vacant posts as well as the occupational specific dispensation (OSD)
▪ late submission of invoices by big service providers
▪ Accelerate Community Infrastructure Programme (ACIP)
▪ delays in implementation of the Masibambane projects
▪ delays in the transfer of funds to municipalities
▪ delays in regional bulk infrastructure projects

Ms Fundakubi responded to the Committee's concern on the Department's request for a roll-over amount of R145.8 million despite the under-expenditure.

The reasons for the R145.8 million roll-over request were described (table, slide 5).

Ms Fundakubi responded to the Committee's third concern, which was the shifting of funds from the transfer budget (8.6%) in programme 3 and more than 4% from programme 4 to fund capital projects which was a violation of Section 43(4)(c) of the PFMA.

The reasons for the shifting of funds were:
▪ an amount of R203 million for the construction of the Nandoni Dam pipeline was erroneously allocated to programme 3 (infrastructure) in the Estimates of National Expenditure (ENE) instead of allocating it to programme 4 (regional management).
▪ this error was communicated to the National Treasury and hence the shifting of funds to correct this error and to ensure the true reflection of reporting.

Mr Trevor Balzer, Acting Director-General, Department of Water Affairs (DWA), commented that the Ministry had established a committee to review business structures in the Department and the inception report was under review. The intention was to implement as the Department progressed. The Minister had indicated that where the municipalities were under-spending in terms of the Department's scheduled payments, the Department must withdraw funds and use its own entities.

Mr Balzer said that the half- yearly review would go to the Minister in the next week or so.

Discussion
Mr Ramatlakane complained that the Department had failed to report on six or seven of its key targets as required by the PFMA. On these particular targets the Department had not said a thing, and had reported only a fraction of what it was required to report. Also the Department had exceeded the limit of 8%.

Dr Rabie referred to slide 3 (reasons for the under-expenditure in the 2nd quarter) and asked about poorly resourced municipalities. He pointed out the profound problems of raw sewerage in rivers, including the Berg River, and this problem was exacerbated by its affecting our exports. He asked if there was a master plan to upgrade sewerage treatment as raw sewage was a problem in all provinces. It was an untenable state of affairs.

Mr Balzer replied that through the Department's water licensing it was trying to contend with all of the backlogs. The Department had to build a residual capacity in order to proceed with its intervention to deal with the backlogs. Its key mandate area was the issuing of licences. The Department was going to convert to an online licensing system. There was some synergy with the environmental processes.

Mr Balzer said that the most viable dam sites had already been exploited. The Department needed to look at a number of other interventions including recycling waste water. He himself practised rainwater harvesting from his roof by means of rainwater tanks at his home in Pretoria and commended this practice for urban areas as well as in rural areas.

The Chairperson asked if a certain dam was used for recreational use. Was it freely available or was it under control?

The Department replied that the dam accident was a swimming accident.

The Chairperson asked about the shifting of funds for personnel.

Mr Balzer replied that there was an advertisement for further recruitment and the Department could provide more statistics. Mr Balzer had been Acting Director-General since Nov 2010 but the recruitment process was at its end stages and the Department hoped for an announcement by the end of the year. He acknowledged that the Department was known as 'the Hollywood department'. It was busy filling 22 of its senior management service (SMS) positions. He alluded to the problem of head-hunting.

Mr Ramatlakane asked if the Department had a plan for its organogram. He was reluctant to buy this long explanation. It was really not true and he asked why it took a year to fill a position.

The Chairperson told the Department that the previous week the Human Sciences Research Council (HSRC) had given a presentation to the Committee and told Members that there were many science graduates who could not find jobs. On that basis the Committee found it hard to understand the Department's reasons for taking so long to fill positions.

Ms Mashigo said that the Department had promised a report. The Department was with the Committee on 22 March 2011.

The Chairperson noticed that everyone was shaking his or her head when he had mentioned donor funding. The Committee wanted information on which it could rely. The Committee had returned to Nandoni because it could not obtain the report from the Department. It would be very useful if the Department could give Members information.

Mr Balzer accepted the Chairperson's point and would follow-up on the previous reports.

Mr Balzer was aware that Members had only a draft report on the Nondoni dam.

The Chairperson told Mr Balzer that he must provide the report. He preferred that Mr Balzer cooperate rather than force the Committee to exercise its Parliamentary powers to demand the report. 

Mr Ramatlakane said that Mr Balzer should actually write this report but it should be subject to a face-to-face discussion.

Mr Balzer replied that he needed to obtain the Minister's signature on the Nondoni report and he would hope to send it to the Committee by the end of the month.

The Chairperson demanded that it be delivered on 23 November – in this way the Committee was being generous in giving Mr Balzer seven days.

Mr Balzer undertook to provide the report.

The meeting was adjourned.

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