Meeting SummaryThe Committee held public hearings, attended by representatives from all nine provinces, to discuss the findings set out in the Auditor General’s (AG) report on infrastructure delivery in the provincial departments of Education. The Chairperson noted that there were large backlogs in infrastructure delivery and that the Minister of Finance had indicated that more funds would be provided to the provinces for infrastructure development.
Members noted that the report covered 133 projects, totaling R1.8 billion, which was 11.25% of the infrastructure spending, and it seemed that the findings could represent merely a small portion of what was happening. There were concerns that the provincial Departments of Education were not co-operating in supplying the requisite documents to the Auditor-General, and Members asked why the documents were not supplied, whether anyone had been held accountable, and whether provinces were able to show that their document systems had improved and that they were able to give all documents that were called for. Although the departments tried to outline what was being done, a Member thought that the written and verbal responses could be called into question, and said that it did not seem that the recommendations in the Auditor-General’s report had been seriously taken into account. Further concerns were raised on the appointment of contractors for the projects, in particular the fact that there was not, as required by law, consultation on who was registered with the Construction Industry Development Board before appointments of contractors were made. Members also asked whether, having become aware of the problems, the provincial departments had then gone back and done investigations into the circumstances of all other appointments, and asked also how many of the currently-employed contractors were registered, and whether there was any consideration of the consequences of using non-registered contractors on service delivery. They were also concerned that it appeared that no action had been taken against those who had breached the law. Members were also concerned that there appeared to have been a number of violations of the Public Finance Management Act (PFMA). They asked whether the officials were aware of the provisions of that Act, and specifically that Accounting Officers could be held criminally liable for failure to comply.
Members questioned whether there was suspicion of collusion around the prices quoted for building a school. They questioned the specific circumstances surrounding the infrastructure in a number of instances in
Provincial Departments of Education: Auditor-General’s infrastructure performance audit
The Chairperson welcomed delegates from the Auditor General South Africa (AGSA), National Treasury and provincial Departments of Education and Health. He noted that there were huge backlogs in infrastructure delivery in
Mr P Pretorius (DA) said that the Auditor General’s report covered 133 projects totaling R1.8 billion, which was the equivalent of 11.25% of the infrastructure spend over a three year period from 2008 to 2010. This suggested that the findings set out in that report represented merely the tip of the ice berg. One of the most worrying facts was that the provincial departments did not co-operate in supplying the requisite documents to AGSA. He therefore asked for an explanation why they had failed to supply those documents. Noting that the AGSA report said that disciplinary action had to be taken, he also followed up with a question as to whether anyone had been held accountable for this.
Ms Mahlasedi Mhlabane, Head of Department of Education,
Advocate Modidi Mamonya, Superintendent General for Education,
Dr Nkosinathi Shishi, Head of Department of Education, KwaZulu-Natal (KZN) replied that this Department agreed with the Auditor-General’s findings but said that the issue sat with the implementing agents, although this provincial Department of Education had taken action against its staff who were supposed to monitor the programme. It had also engaged with the implementing agents, the Department of Public Works, and Ithala.
Mr Stanley Malope, Head of Department of Education,
Mr Pretorius noted that no province had responded that its document system had improved, and had not said that they would be able to give any and all documents that were asked of them.
Mr Abe Seakamela, Acting Superintendent General of Education,
Mr Tebogo Pharazi, Acting Head of Department of Education,
Mr Siphiwe Madondo, an official of Ithala, confirmed that Ithala had a document management system in place
Mr Pretorius said that Mpumalanga was the province which showed the most projects with problems, citing 30 projects valued at R250 million.
Ms Mhlabane said there had been improvements since 2010/11
Mr Legodi Boshielo, Head of Department, Department of Education,
A member of the Committee asked if, when projects were awarded, there were time frames attached.
Ms Mhlabane replied that projects were awarded with time frames.
Ms Penny Vinjevold, Head of Department of Education,
Mr R Ainslie (ANC) said he did not believe the written and verbal responses he had heard regarding the Auditor General’s recommendations. He said it appeared that provincial departments were destined to repeat the problems that had been noted. He quoted an example that the Auditor General referred to the Construction Industry Development Board (CIDB) register, which should be consulted before a contract was awarded. There was little evidence that that report had been taken to heart. He asked why the provincial departments had not consulted the CIDB register, and also asked if their heads were aware that the failure to consult the register was a contravention of the law. In
Ms Mhlabane said that the contractors had been appointed by the implementing agents.
Mr Ainslie said that this response was not acceptable, and was an attempt to pass the buck, although the Department itself remained responsible. He asked in how many cases, other than those already identified, this had happened, pointing out the report of AGSA was based on a sample only. He asked if any retrospective investigations were being carried out to find out the extent of the problem.
Mr Malope replied that his Department was implementing changes to correct the challenges and that the matter had been raised at Executive Committee level. Action had also been taken at the Department of Public Works.
Mr Boy Ngobeni, Head of Department of Education,
Mr Matthew Mohlasedi, Head of Provincial Department of Public Works, Roads and Transport,
Ms A Dreyer (DA) said that the Auditor General’s report stated that the provincial departments did not comply with the necessary legislation and requirements. For instance,
Mr Mohlasedi said his Department had drawn up an action plan to address the audit outcomes.
The Chairperson asked why there had not been a plan in place all along. He asked whether non-compliance could be detected.
Mr Ainslie asked whether the provincial departments were aware of what effect non-compliance would have on service delivery. He said page 30 of the Auditor General’s report reflected all the cases of substandard work.
Mr Boshielo said some of the key officials in the Department had left. He conceded that there were errors around the Department of Public Works projects and his Department was now checking the CIDB register regularly.
Mr Ainslie said that it was apparent that no actions had been taken against people breaking the law.
Mr Pretorius asked if all contractors used at the moment were registered.
Mr Mohlasedi replied that all were checked for compliance, with the exception of the Sakhabakhi Programme contractors.
Ms Dreyer asked the name of the contractor involved in building the
Ms Mhlabane named the consultants used, and noted that it had later been found that the soil had been unsuitable, and the building was falling apart. Action had been taken against the consultants and the matter was being taken to court, to reclaim the money paid.
Mr Ainslie said the
Ms Mhlabane noted that in the case of the
Mr Ainslie asked how the budget for the project jumped from R508 000 to R8.5 million.
Ms Mhlabane said the R508 000 related to the construction of the existing classes. There was an extra cost involved in moving to mobile structures for the temporary school, as well as for the primary school.
Ms Dreyer asked if all
Ms Mhlabane replied in the affirmative. She said that her Department would provide the name of the supplier of the mobile temporary accommodation, as well as the list of schools to which the mobile classrooms had been deployed since.
Mr Ainslie said the AGSA report indicated that in
Mr Ngobeni replied that this was a reflection of historical inequities. The Department had its shortcomings and had undertaken a study to correct them, including a demand model that included pupil transport as a factor.
A Member of the Committee asked whether the town planners had been involved in the construction of a school referred to on page 23 in the Auditor General’s report. A further question was asked as to why projects that should have been completed in nine months finally took 53 months to be completed.
Adv Mamonya replied that the infrastructure programme had a number of challenges. Money had been shifted in the middle of projects, for use in effecting repairs to disaster-struck schools. Cash flow was a problem when reprioritisation took place. Project funds were used to pay the salaries of teachers, and this led to the building work coming to a halt. A lack of planning and monitoring capacity in the Department resulted in poor workmanship.
Ms Mhlabane replied that a town planner had been involved with projects at her Department.
Mr S Thobejane (ANC) said that there were many violations of the Public Finance Management Act (PFMA). He asked if officials were aware of what PFMA set out, of what their duties were, and also that they were liable to be charged in respect of their failure to comply with the PFMA. He said gross negligence for punishable offences was being perpetrated.
Mr Thobejane also noted the instances set out on page 31 of the Auditor General’s report, saying that in the
Another Member of the Committee added that in certain instance in
Mr Malope replied that the project appointments had occurred in 2005 and so he could not give a full account of what happened. The person involved had been the Head of the Provincial Department of Public Works. The tenders had been reversed. The Department had pushed the Executive Committee to agree that the Department should now attend to all projects under R10 million.
Adv Mamonya stated that in respect of the Bisho Youth Care Centre, there had been a delay in the design and planning. The budget of R118 million related to the first year of operation only. The tender had been published in local newspapers, which had provincial coverage, and the contractor, Grinaker-LTA, had been a reputable company.
Mr Boshielo replied that the officials involved in the project under discussion had since left the Department. He said that he was not trying to “pass the buck” but was setting out where the responsibility in fact lay.
Ms Dreyer asked who the contractor for the
Ms Dreyer also noted that there was poor attendance at site meetings for new school projects in
A member of a provincial Public Accounts Committee asked whether the provinces had monitoring units to oversee public works, as the Auditor General had recommended that the Department of Basic Education had to monitor the work.
Mr N Singh, (IFP) said that he had found, during a site visit to the
Adv Mamonya replied that two companies had tendered for the Bisho Youth Care Centre. The tender required the highest grading level and the quotes had been for R230 million and R250 million. The cost escalation was due to certain items not having been included in the initial tender. He said that no contractor was owed money by his provincial Department.
Mr Malope replied that officials had declared their interests, and that the contractor, Thulo Construction, was no longer in the construction business. There had been monitoring capacity problems, but his Department was appointing people with a construction industry background to monitor projects. He said there were a few instances where there was suspicion of collusion, and conceded that the supply chain management procedures had to be overhauled.
Dr Shishi said that action had been taken in the case of
Mr Benny Padayachee, Acting Deputy Director of Planning, National Department of Basic Education, said there was a team in place at the National Department, specifically to monitor the infrastructure development programme.
Mr Ainslie asked if the provincial Department in
Mr Mohlasedi said this provincial Department had completed an action plan and the deadline for action to be taken was November 29.
Mr Ngobeni said that in his provincial Department, there were some problems with technical non-compliance in supply chain management, but that the Chief Financial Officer was now involved in correcting this.
Mr Boshielo said that this provincial Department had discussed the Auditor-General’s report with its implementing agents and was tightening procedures.
Adv Mamonya said that the Eastern Cape Department had done a report in 2007, noting systemic faults. There were issues that needed to be investigated, for instance the Bisho Youth Care Centre.
Mr E Sogoni (ANC), Chairperson, Standing Committee on Appropriations, said he appreciated the Auditor-General’s report. He was most concerned by the fact that many Accounting Officers seemed either to be in denial or were failing to comply with the PFMA regulations and rules. Some of the resources allocated had been conditional grants, but these necessary rules had not been applied. He said he was concerned to hear that the North West Province’s record keeping was limited to keeping boxes of documents, and urged it to start implementing other means of record keeping. He said Mr Singh’s comments on collusion on the cost of building a school needed to be followed up.
Mr Kimi Makwetu, Deputy Auditor-General, said that it was important to note that the total budget for the period under review was R32 billion, which was split equally between Education and Health departments. Based on what he had heard that day, he felt that most of the cost issues would recur. It was important from an oversight perspective, and Portfolio Committees should be keeping closer controls. Irregular expenditure occurred where control methods were not reliable and sustainable. He said he did not know when another such study would be undertaken.
Mr Raymond Elisha, MEC for Education and Training,
Mr John Blok, MEC for Finance,
Mr Dickson Masemola, MEC for Education,
Ms Barbara Creecy, MEC for Education,
The meeting was adjourned.
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