Basic Education, Social Development & Public Works spending

Standing Committee on Appropriations

04 September 2012
Chairperson: Mr E Sogoni (ANC)
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Meeting Summary

The Departments of Basic Education (DBE), Social Development (DSD) and Public Works (DPW) outlined their 4th quarter performance. All departments reported areas of under-expenditure and the Committee commented that departments’ total underexpenditure of R11 billion had a very negative impact on the South African economy. The DBE noted that there were specific variances in infrastructure and construction. The main reasons for under-expenditure included late receipt of invoices and the lack of capacity at the local levels, resulting in unspent conditional grants.
Members expressed their concern with the high levels of under-expenditure and the impact this would have on the whole economy. They asked the reasons for, and steps taken to regularise under-spending in Limpopo and the Eastern Cape, asked about the implications of the section 100 administration orders, debated the measures that were described to improve the accounting system and asked what steps were being taken to train and employ staff. They were particularly concerned with reports on the school infrastructure programme, asked why there had been underspending on nutrition and school transport programmes and questioned if similar problems were likely to arise with the textbook delivery in the following year. It was clear that many of the problems arose through poor planning.

The Department of Social Development (DSD) had spent 98.9% of its budget, but its 1% underspending translated into the figure of R1 billion underspending, which must again be seen in perspective of the total of R11 billion underspending across all the departments. The DSD pointed out that social assistance grants comprised 23.9% of the total budget, and it was very difficult to make accurate projections on these. The issues that led to underspending included fraud, and incorrect charges levied by Department of Public Works (DPW) for leases. A number of once-off projects boosted expenditure in the last quarter, and the cost of legal actions brought against DSD was quite significant, but had forced this Department to address the backlogs. DSD was also focusing on recovering money from defrauding debtors and to assess whether certain debts should be written off. Transfers to NGOs had improved, although the applications were too complex. There was some underspending on old-age grants, child support grants, foster care and other big components, and instances of non-collection were being investigated. Policy changes such as eligibility of refugees to social assistance affected the spending. Members were concerned about the huge opportunities lost to the economy through R1 billion not being spend, although they also commented that the growth in social assistance grants would at a point become unsustainable. They asked about the monitoring of social assistance grants, and the categories of non-South Africans who could apply for them. They asked how the late submission of invoices could be addressed, questioned the amount of rent being paid and whether other options were considered, and asked that at the next briefing, figures also be presented for South Africa Social Security Agency underspending. Retention strategies for social workers were discussed.

The Department of Public Works (DPW) had shown underspending in several areas, including the Expanded Public Works Programme (EPWP), where there continued to be slow uptake with municipalities not complying with requirements, despite new systems of incentive grants, largely because they still had numerous capacity issues. 

This Department showed 90% expenditure, with R768 million not spent, of which R354 million related to transfers and subsidies and R425 million to capital expenditure. Disruptions to tenders, late approval and allocation of programmes, planning issues, late implementation of construction, and instability of project leadership at regional offices all contributed to underspending. Members questioned how the DPW managed to overspend on personnel, when it had so many vacancies, and heard that most of the overspending was on contracts, but DPW was trying to reduce these contract posts. They commented that the spending on capital assets was very serious, given the need to refurbish the buildings, and wondered why leases were negotiated and what other options there were. They questioned why the Independent Development Trust had been paid upfront, given its track record, and noted that this error led to the dismissal of the previous Chief Financial Officer. They questioned the asset register, the low take up of EPWP, and inner-city regeneration, and urged an immediate focus on skills development. The position of Agrément South Africa was questioned, and written reports were requested on some issues, including accounting for local properties.

Meeting report

4th quarter 2011 performance reports
Department of Basic Education

Mr Bobby Soobrayan, Director-General, Department of Basic Education, noted that this Department (DBE) would focus on variances between budget and expenditure in the report.

Ms Ntsetsa Molalekoa, Acting Chief Financial Officer, DBE, highlighted significant variances in the Programme 4: Planning, Information and Institutional Development, Programme 3: Teachers, Education and Human Resources Development, and in respect of capital assets, goods and services, earmarked funds for specific projects, and the Schools Infrastructure Backlog Conditional Grant.

Under Programme 1: Administration, the under-expenditure of 2.2% was due mainly to fluctuations of the Consumer Price Index, and delays on projects related to Office Administration. In Programme 2: Curriculum Policy, Support and Monitoring there was under-expenditure of 5.4%, due to changes in procurement models, which caused delays, as well as late submission of invoices, and the withholding of the final transfer for the Dinaledi Schools Conditional Grant to Limpopo, because of that province’s poor expenditure. In Programme 3 the under expenditure of 7.5% had been caused by resignation of external moderators, and challenges in finding suitable replacements, and late receipt of invoices for certain projects. In Programme 4, under-expenditure of 15.8% was mainly due to the withholding of the final transfer of the Education Infrastructure Grant to the Eastern Cape, due to this province’s lack of capacity to deliver and low spending on designated projects at the provincial level.

Ms Molalekoa summarised that under-expenditure on infrastructure was a major issue that had also been discussed on previous occasions. Under-expenditure on workbooks had started out as a saving which was approved by the National Treasury.

Discussion
Ms T Mfulo (ANC) asked about turnaround times, and at what point the Department noticed that there were issues with payments to the Department. She noted that the late invoices were unacceptable, and the Department should uphold a system that ensured that there were no delays.

Mr Soobrayan replied that in the case of workbook invoices, the Department had only become aware of the late payments in respect of the later workbook deliveries, as the initial payments were received on time. DBE was working on getting invoices in on time, and was asking its directors to ensure that this was pursued. Some of these issues would be resolved simply by the move to an accounting system based on delivery.

Mr M Swart (DA) commented that the under-expenditure issue was a serious concern, and it was not possible to gloss over expenditure of R1.2 billion. Non-delivery of schoolbooks and failure to spend infrastructure grants were worrisome issues that demonstrated lack of proper planning and management in the DBE. Furthermore the fact that the Technical Schools Recapitalisation Grant reflected only 70% spending was particularly worrisome, as the country needed skills development.
 
Dr S van Dyk (DA) urged that unspent money should not be seen as a saving, and said that the opportunity costs of taking money out of the system were huge, in view of the multiplier effect in the economy.

Dr van Dyk said that the problem with invoices should be resolved by switching from an invoice-based system of accounting to an accrual based accounting, which relied on service delivery rather than receipt of payment. This had been introduced across other departments, and approved by National Treasury.

Dr van Dyk said the DBE would have to explain its communication plans and initiatives that would ensure that such issues at the local level would not repeat themselves. He noted that he would like to submit further questions in writing.

Mr Soobrayan said that the DBE was well aware that under-expenditure did not equate to savings, and are not defined as such, although some of the money not spent as budgeted on workbooks was in fact a genuine saving when the DBE procured these same workbooks at a lower price. He assured Members that the DBE would ensure the trend of under-expenditure did not continue, by tackling the two broad reasons for under-expenditure, including underlying technical problems and unanticipated events. Technical problems would be addressed, for instance, by the new programme of teacher-union collaboration, a new initiative that had met with great success, after a few teething problems had affected planned delivery. The switch to a new accounting system would be implemented and would make a difference to the spending of future budgets.

Mr N Singh (IFP) asked why the DBE had not mentioned any applications for rollovers in the presentation.

Ms Gugu Ndebele, Deputy Director General, DBE, replied that there had been applications for rollovers to the tune of R1.07 billion.

Mr Singh noted that underspending in the education field was a serious concern, and he noted that any under-expenditure of R500 million would have a huge impact on the poorest members of society. It was the responsibility of Committees to ask these hard questions, rather than of civil society organisations, which had been performing this function lately. He asked if there were problems of internal capacity in the DBE, or whether it was extraneous factors that were contributing to under-expenditure.

Mr Soobrayan replied that the Department was thin on the ground, in terms of human capacity, and had reached a point of diminishing returns. Overwhelming pressure had been created by the national responsibility of the monitoring of provinces and the national DBE could not possibly monitor 27 000 schools effectively. It understood that conditional grants could not ensure external capacity, and had begun rethinking its strategy in this regard.

Mr Singh asked if contractors were simply milking the DBE, given the infrastructure problems, and whether there was any evidence of collusion.

Mr Soobrayan said that there was not necessarily evidence of collusion, but there had been a problem with understanding different markets, and he noted that suddenly increasing the demand in a particular market meant that prices would rise. The State should rather ensure that demands were phased over a period of time, to ensure security of supply and provision of services at reasonable prices. DBE had certainly not expected the prices of building material prices to rise so significantly, and this was not simply the result of greed by certain contractors, but was a systemic problem across the sector. The Department had been attempting to use companies using local materials and innovative methods to build schools at good prices.

Mr Singh asked whether the curriculum was reviewed too often, resulting in increased costs for the DBE.

Mr Soobrayan said that the original Curriculum Review was still in place. The Minister of Basic Education had not called for another review and was implementing the past curriculum and attempting to avoid instability.

Mr M Skosana (IFP) asked whether DBE could provide the Committee with a comprehensive strategy to overcome the problem of under-expenditure, including a way to deal with the resignation of staff members.
 
Ms Ndebele replied that resignations had often been filled by existing staff, but that it took time to find replacements, leading to under-expenditure.

Mr L Ramatlakane (COPE) wondered how the DBE would quantify the impact of the 1.2 billion of under-expenditure, to a South African child.

Mr Soobrayan emphasised that the cumulative impact of under-expenditure was very large, with high opportunity costs, and a loss of investment in the economy.

Mr Ramatlakane recalled the problem in Limpopo where cash-flow problems prevented payment of teacher salaries and asked what the problems were here, given that simultaneously there had been under-expenditure.

Mr Soobrayan said that Limpopo had defaulted on various Treasury requirements, and for this reason money was not allocated until the underlying reasons were resolved. It was not possible simply to re-allocate money, which was a complex process, involving Parliamentary approval and rebalancing of the Provincial budgets. Instead, Provincial Treasury had managed to find the money within the Province.

Mr Ramatlakane also wanted to know whether DBE could assure the Committee that there had been deadlines and time-frames given for the completion of new schools, including 12 schools which had been planned for completion in August.

Ms R Mashigo (ANC) asked at what level the DBE would call under-spending “insignificant”.

Ms Mashigo asked why there had been late appointments, queried if there would be books at all schools in January, and whether the Department of Public Works (DPW) had ever been given the opportunity to build a school.

Ms N Gina (ANC) asked whether there had been mistakes made in delivery of Dinaledi school books what challenges the DBE might be able to identify as problematic in future.

Mr Soobrayan replied that, in previous years, the timely provision of workbooks that the DBE had managed to effect had saved schools where timely textbook delivery had failed. There had been meetings with contractors, the National Treasury and several Ministers around the issue of failed deliveries, and National Treasury had in fact advised that punitive actions against contractors had been counter-effective.

Ms A Lovemore (DA) noted that expenditure on employees accounted for a significant percentage of budgets, at the expense of textbooks.

Ms Lovemore said that, in the Eastern Cape and KwaZulu Natal (KZN), the DBE must surely have received prior warning of the some of the budget issues for the following year, and asked if the Department would reach its own target of providing a textbook for every subject to 85% of children.

Ms Lovemore wanted specific figures regarding the extent of under-spending in Limpopo that resulted in the withholding of the final transfer for Dinaledi Schools, and the number of employees laid off which resulted in under-spending in Programme 3. She asked for clarification on processes in place to ensure infrastructural provision to those provinces.

Mr Soobrayan replied that the 85% target was being monitored and reported on quarterly. The Department’s target for 2013 had been set at October 2012, as a tight timeframe that would ensure timely delivery. DBE had often found itself awkwardly placed in relation to conditional grant spending, which it was unable to resolve. The problems in some provinces might worsen, but a task team had been set up to deal with the target on a Province-by-Province basis.

Mr Skosana asked whether Chairpersons of the Appropriations Committee and Basic Education Portfolio Committee could meet occasionally to discuss issues before they got out of hand.

The Chairperson confirmed that it would be possible to arrange such meetings. He further commented that the total R11 billion of under-spending across all departments called for significant collaboration between Committees.

Mr G Snell (ANC) asked how much the Section 100 interventions had contributed to the under-expenditure of the DBE. He also asked if these interventions had given the DBE the ability to control how the money was spent in the Provinces.

Mr Soobrayan responded that DBE did not receive any resources or funding to enforce Section 100, which put strain on its capacity as it had to divert personnel to Limpopo and the Eastern Cape.

Mr Snell asked if the schools in the Eastern Cape had gone out for tender yet and if the DBE was expecting underexpenditure, if they had not.

Mr Soobrayan said that no schools had been handed over, including the 12 which had been planned for August. The tenders had been signed.

Ms H Malgas (ANC, Chairperson of Portfolio Committee on Basic Education) asked for clarification on the R73 million under-spending on the School Nutrition Programme.

Ms Molalekoa noted that this was due to late submission of invoices by suppliers and there would be a rollover.

The Chairperson said that lack of funding for school transport affected children’s development and asked where the responsibility lay for resolving this issue.

Mr Soobrayan replied that the responsibility for school transport varied from one province to another, with the provincial Transport Departments often being responsible.

The Chairperson concluded that many of these issues pointed to problems with planning, especially with respect to infrastructure. There had been indications that more under-expenditure would be expected on the unfinished school buildings. The Chairperson recommended that parallel planning for the fiscal year of 2013/2014 should take place along with the 2012/2013 protocol, in order to stop time-lags and to obviate the need for rollovers. It had become clear that Section 100 issues needed to be engaged with at Parliamentary level. The DBE needed to deal with the availability of skills and under-expenditure due to vacancies.

Department of Social Development briefing
The Chairperson noted an apology from the Director General of the Department of Social Development (DSD) and said that this Department was invited to explain its large under-expenditure. From a percentage perspective, there had been 1% underspending, but given the size of the budget, this translated to R1 billion underspending, which must also be compared to the total of R11 billion underspend across the entire government.

Mr Coceko Pakade, Chief Financial Officer, DSD, noted that the DSD had been using a model of projecting expenditure that was developed jointly with the National Treasury (NT). He agreed that the DSD managed a huge budget, largely due to the Social Assistance Grants, which comprised 23.9% of the total budget. Even slight changes in projections here would have a very large effect on expenditure variance. The exact percentage of spending in the 2011 financial year was 98.9% of the budget.

Mr Pakade said that fraud had been one issue that led to variance in the expenditure figures. Over-expenditure and streamlining of the system had been major challenges for DSD in the past. Another major factor was the cost of legal processes brought against the DSD because of the backlog in appeals. There had been efforts to resolve these backlogs. Another factor was that the DPW had charged incorrectly for lease invoices for the DSD’s building. A number of once-off projects, including substance abuse programmes, furniture and building upgrading, and IT infrastructure updates had increased expenditure in the final quarter.

Those who had since left the DSD were largely responsible for most of the under-expenditure. The DSD had begun assessing irrecoverable debts, and the impact of attempting to recover them. The focus of the Department had shifted mostly to attempts to deal with defrauding debtors, who had to pay back money to the State, with interest.
 
Transfers to NGOs had been improved, with few areas where there were delays. However, complex templates had made it difficult for NGOs to apply, and if this was simplified the under-expenditure could be reversed.
 
There had been almost full spending of the Social Assistance Grants (SAGs), although there was some underspending in old-age grants, child support grants, foster care and other big components. In certain cases, grants were not collected, but this was subsequently investigated by South African Social Security Agency (SASSA). Certain policy changes had affected the spending model, including refugees becoming eligible to social assistance and an increase in the child support grant eligibility age.

Discussion
Mr Swart said that R1.1 billion represented a large lost opportunity cost to the economy, with the R730 million in unpaid grants as the major portion of the underpayment. However, the exponential growth in social grants would become unsustainable in the future, and therefore the unpaid grants might be considered a saving. Nonetheless, Mr Swart called for better budgeting. He asked what component of the R730 million represented savings achieved through fraud investigations by SASSA.

Mr Pakade replied that it was very complicated to provide better budgeting, given the inherent unpredictability of any projecting model that had to take into account the large population of the country. Awareness campaigns on fraud and corruption were contributing factors to people now returning funds to which they were not entitled. However, it was difficult to assess the exact figures.

Dr van Dyk acknowledged the complex nature of this large budget. He asked for clarification on the monitoring and control of the SAGs.

Mr Pakade responded that there had been a number of initiatives including working with partners such as the South African Revenue Service (SARS), to improve monitoring and control of SAGs and improvements were obtained through data-matching.

Dr van Dyk asked how the Department ensured that only people who were eligible to receive grants would receive them. He asked who would be considered as falling within the category of political refugees, and how much had been allocated to these beneficiaries.

Mr Pakade responded that the DSD interfaced with the Department of Home Affairs at an early stage, to exclude people who were not South African citizens from being accepted on the grant framework. All grants were reviewed annually, with special attention being given to large grants. Over 60 000 registered refugees could qualify for grants, if they met the right criteria. Asylum-seekers did not qualify.

Ms Mfulo asked what systems were in place to apprehend fraudulent claimants.

Ms Mfulo asked why there was under-expenditure on old grants, and remarked that the Department needed to resolve the issue of late submission of invoices.
Mr Pakade replied that an electronic monitoring system of invoices had now been rolled out, which would further improve the functioning of the DSD.

Mr Snell asked if it was correct that the DSD paid R24 million in rent for its building, and questioned whether this could not be reduced.

Mr Pakade replied that there had been several options considered. One was an option to purchase and renovate a building; another was the option to move out altogether and purchase an entirely new building that would house the DSD and its entities.

The Chairperson wanted to confirm that the figure of R730 million under-spending mentioned in the presentation was the final audited figure.

Mr Pakade replied that the final audited figure amounted to R1.13 billion for the DSD, with R730 million having been under-spent in grants. SASSA, which had its own R6.2 billion budget, showed similar levels of under-expenditure, although he had not presented the details in this presentation.

The Chairperson said that it was a positive indication that DSD was aware of this under-spending within SASSA, but requested that the SASSA figures should also be included in future presentations to the Appropriations Committee.

Mr Pakade stated that SASSA often presented its finances separately, which was the reason he had not done so, but in future he would present a report on all entities simultaneously.

The Chairperson asked how much the DSD spent on court cases.

Mr Pakade replied that one positive effect of the court cases was that it had forced the clearing of backlogs and the creation of an internal review system.

The Chairperson asked for clarification on what arrangements DSD had in place to try to retain trained social workers.

Mr Pakade replied that retention strategies were broader than training, as the DSD looked as the social situation of its employees and the provision of additional resources, including transport and access to internet and computing resources. Housing and rural allowances were other potential retention strategies.
The Chairperson concluded that there was a need for more future cooperation between the Appropriations Committee and the DSD.

Department of Public Works briefing
The Chairperson welcomed the Chairperson of the Public Works Portfolio Committee and noted that in respect of the Department of Public Works (DPW) there were concerns around under-expenditure, particularly in regard to the Expanded Public Works Programme (EPWP).

Ms Mandisa Fatyela-Lindie, Acting Director General, DPW, outlined the five programmes of the DPW, as Programme 1: Administration and the Ministry, and Corporate Services branch. The bulk of the spending occurred in Programmes 2 and 3, since they included programmes such as asset management and special projects. Programme 3 also dealt with the EPWP, including the conditional grants and service grants. Programme 4 dealt with construction and property regulation. Programme 5 covered auxiliary services. Under-expenditure was related to both Public Works capital, and client capital projects. The causes of under-expenditure were mostly related to planning issues.

Ms Fatyela-Lindie said that EPWP under-expenditure had now been addressed through a new strategy involving incentive grants. Local municipalities in the past often failed to claim money, causing under-expenditure, and these issues would only be resolved if capacity issues affecting the local government sphere could be addressed.

Ms Sue Mosegomi, Acting Chief Financial Officer, DPW, presented on the figures for the fourth quarter, focussing on infrastructure and EPWP performance and variance in expenditure (see attached presentation). She noted that these were preliminary figures, as the final audit had not been performed.

There had been 90% spending, similar to the previous year, with the under-expenditure amounting to R768 million. Of this, R354 million of this fell under transfers and subsidies. Payment for capital assets and fixed structures’ under-expenditure amounted to R425 million.

In Programme 1, variance was not a major issue, but there was R70 million over-expenditure. Programme 2 had a more serious issue with infrastructure under-expenditure at R425 million. In Programme 3, EPWP transfer subsidies under-expenditure comprised R357 million. In programme 4, there was a variance of R2.2 million. In programme 5, there was a variance of R6.5 million.
Infrastructure expenditure and inner-city regeneration expenditure were particularly low, at an average of 70% of spending.

Ms Mosegomi said that the reasons for under-expenditure included a disruption of the tender process between May and July 2011, late approval and allocation of programmes, planning issues, late implementation of construction, and instability of project leadership at regional offices. The EPWP infrastructure incentive grants showed significant differences between the Provinces, with only 16% take-up in Northern Cape, 5% in the Western Cape, and in total, only 85% average across all the provinces. The reasons for these low rates included poor and under-reporting on EPWP projects.
 
Discussion
A DA Member said that it was incomprehensible that the DPW could overspend on personnel, given the number of vacancies. Staffing seemed to absorb a lot of money, but without delivering results on big projects such as infrastructure and EPWP.

Ms Fatyela-Lindie replied that the overspending on employees was found in relation to the contracts, and DPW was considering not renewing a number of these, to cut down on its spending. Contract posts for non-essential and support positions such as HR would be removed, in favour of employing young professionals such as engineers and architects.

Mr Swart was not surprised that the report was regarded as preliminary and still under investigation. The figure of R768 million was serious issue and represented a significant percentage of overall under-spending. R425 million was under-spent on capital projects and buildings, and this was even more worrisome given that those buildings were in desperate need of refurbishment and maintenance.

Mr Swart asked whether leases had been negotiated, rather than put out to tender, and asked why tenders were not used as the universal standard for DPW. Negotiated leases often benefitted specific individuals and ensured limited access, rather than wider access gained through public tenders.

Ms Fateyla-Lindie replied that negotiated leases represented only one way of procuring leases, and should not be the norm. DPW had in fact decided to decrease the number of leased properties because of the poor state of so many buildings. Another solution to negotiating leases was investment in government stock, but there was insufficient budget for this in DPW.

Ms Mfula asked why Independent Development Trust (IDT) had been paid up front, given their demonstration that they were not trustworthy, and she noted that these payments did not result in the expected outcomes.

Ms Fateyla-Lindie replied that IDT had been an officially recognised body of government, but she conceded that DPW should have, but did not, apply to National Treasury for permission to make these payments. The former Chief Financial Officer had been released as a consequence of this irresponsible behaviour.

Ms Mfula asked how the thousands of people under intensive training were spread across the country. She also asked why classifications of vacancies had been lowered in certain areas.

Ms Fateyla-Lindie explained that there was a system of classifying different regions. Some regions had a larger budget, and this meant higher classifications, such as Gauteng and the Western Cape. The DPW was still looking for ways to incentivise professionals to work in rural provinces. 

Ms Mashigo (ANC) said that there was a very serious problem with the immovable asset register, since the asset rate appeared far too high.

Ms Fatyela-Lindie replied that the DPW was engaging with Ernst & Young on this, and she agreed that there was a need to enhance the register, develop it, and deal with the issues.

Ms Mashigo asked how the low take up of EPWP incentives was being resolved and how municipalities were being supported by the DPW.

Ms Fatyela-Lindie replied that EPWP under-expenditure was being addressed by signing of Memorandums of Understanding.

Ms Mashigo asked for more information on tangible results of inner-city regeneration.
 
Ms Fatyela-Lindie replied that inner-city programmes needed to be discussed at a Portfolio Committee meeting. These programmes attempted to ensure that the inner city precints did not fall into decay, and one way to do this was to keep government departments in the city centres. However, it had been affected by mayoral leadership changes, which forced the DPW to scale down the programme. A written report with more detail would be submitted on this.

The Chairperson asked what had been done about skills development, pointing out that this was needed to overcome the lack of capacity that lay behind the under-expenditure. He also asked what had happened to the person who had been responsible for the advance payments to IDT.

Ms Fatyela-Lindie replied that a lack of capacity and skills within DPW was largely due to its inability to attract skilled young engineers and architects, which it had more recently attempted to resolve by restructuring itself. Closing the workshops at DPW had been a mistake, as this in fact lessened its retention of talented employees, and a R500 million budget had now been proposed to reverse this, although there was some difficulty in the negotiations with National Treasury on this point.

The Chairperson commented it was imperative to make the EPWP succeed. This Committee needed to find solutions to the serious under-expenditure, and to address lack of interest from provinces.

The Chairperson asked for clarification on the purpose and position of Agrément South Africa.

Ms Fatyela-Lindie replied that Agrément SA was responsible for handling new building methods and standards. It was an entity that was not independently constituted, but it reported to DPW. There had been attempts to reconstruct it.

The Chairperson of the Portfolio Committee on Public Works commented that legislation was needed for Agrément South Africa.

Mr Snell (ANC) asked why the Built Environment legislation could not be amended so that the payment of professional services could not cost R1.5 billion. He suggested that DPW could surely attract its own employees, by targeted advertising, at a much lower rate.

Mr Snell was in favour of bringing an end to the leases and releasing funding for the renovation of buildings.

Ms Fatyela-Lindie appreciated these recommendations.

Dr van Dyk asked whether the DPW was in arrear on its accounting for local properties.

The Chairperson recommended that the DPW provided a written report on this issue.

The Chairperson summarised that more engagement was needed on the EPWP question and it would be useful to engage also with premiers on this. The Committee supported the turnaround of the DPW.

The meeting was adjourned.

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