Budget and Programmes: briefing by Department

Meeting report

PUBLIC SERVICE SELECT COMMITTEE
22 May 2002
BUDGET AND PROGRAMMES: BRIEFING BY DEPARTMENT

Chairperson: Ms PCP Majodina

Documents handed out
Public Works Budget 2002/3
Presentation on Budget of Public Works

Summary
The Department informed the Committee that they have overspent on their Budget. Poverty Relief has not been budgeted for and client departments have been allocated funds for their own capital works. A milestone agreement has been reached with the landlords, which is going to contribute towards savings in the Department. Eyebrows were raised by members when they learnt that there was a zero allocation for Poverty Relief Projects.

MINUTES
Briefing by Director General
Mr Tami Sokutu: Director General, said that the Department is in the process of changing. They have achieved a milestone across the board, more particularly on poverty relief and the capital works programme. They have renegotiated with the landlords on the maintenance of property and by doing so they have managed to save the Department an amount of R24 million. For 2002 there is no allocation to poverty relief but they are concerned about the levels of unemployment due to no fault of anyone but the way the economy is restructuring itself. They want to make sure that their programmes are sustainable by coming up with the Property Management Agency, which is an arm of government that looks after property.

Briefing by Chief Financial Officer Of the Department
Mr Zingile Ntsaluba: Chief Financial Officer, pointed out that he would concentrate on those issues that influenced their Budget, such as their objectives. Their primary objective is to provide national accommodation for client Departments. They have appointed a consortium to ensure that government unlock its potential and the Department plays its role as the custodian of State property and that needs to be an effort of everyone to maintain State property. He mentioned the fact that their actual budget allocation is R3.7 Billion and this excludes R1.5 Billion for Capital Works, which has been devolved to client Departments. The bulk of the Budget went to major cost drivers which consumed about 84% of the allocation and 6% went to poverty relief.

They have also experienced a slight under-expenditure due to the late start of CETA, the Construction Education and Training Authority. Of major importance is the professional service's cost related to Capital Works. He added that there has been a non alignment of building programmes to MTEF allocation and the lack of prioritisation by client Departments and they need to have a person in each client Department that is knowledgeable on property matters.

The Government is also facing a maintenance backlog, which in 1999 was estimated at R10 billion. They have also been experiencing some problems with the State Tender Board which treated them like any State Department in terms of its procurement methodology. They have been faced with major challenges such as inadequate funding, complex invoicing by the local authorities but they have managed to address these sorts of problems through their Regional offices. They could not use their Property Management Information System, which they use for the payments. Instead they have been forced to use a manual system and the task has been devolved to the Regional offices. There has been an increase in rates and taxes over time as the Department is becoming aware of its properties. Another challenge is to keep up to date the list of properties that has been disposed of. The Department has drawn up a strategic document for massive public works and are engaging consultants that will drive the process.

Ms N Mxenge (Department) added that they have come up with a document called Attack on Poverty which looks at community based public works. This involves more than the setting up of Projects but will ensure that projects are sustainable beyond the twelve month programme. Their Audit Committee is fully functional, effective as a management control. The 2001 audit process took a long time due to changes that have been made within the Department. They have also incurred some over-expenditure to a tune of R34 million with all the historical under-expenditure by the Department and other State Departments bulk of this is in the functional areas. The Department is expected in terms of Cabinet decision to carry on unbudgeted expenses such as flood reliefs and funerals of Ministers or State officials. The R34 Million will be declared to the Auditor General who in turn will declare to SCOPA who will recommend to Parliament that the same amount be allocated to the Department.

Discussion
Mr V V Windvoel (ANC) commented that, although the Department wants the client Departments to be held responsible for maintenance, the State of the Nation address says that the Public Works Department must be, and is, responsible for maintenance. He further asked that when the Department is leaving a building it has occupied, it must be left in its original form. For instance, a client Department may have made some minor changes but the landlord does not want those changes. Owners of properties should also be made responsible. He cited the example of a brothel in Mpumalanga that is being run in a house which the Department if paying for. In the slide presentation, reference is made to certain graves. Where are the graves and are they the graves of liberation fighters?

The Chairperson wanted to know what progress is being made on the disposal of State land. On poverty alleviation she said whilst the Director General has alluded to the fact that there is no budget for it, they need to assess the public works programmes because the Department has a tendency of having rollovers. When the Department is disposing of property does it give a client Department a chance of being the first purchaser?

Rev P Moatshe (ANC) wanted to know what the link was between National and Provincial Public Works Department. He had visited the Province some time ago and found that there was equipment that has been lying idle for four years. What should they do about such a state of affairs? He asked what the Department found when they compiled the asset register what did they find and he also wanted to know what do they meant about having inadequate funds for maintenance. Lastly, he noted that although the Department spoke of Consultants but some of the members had serious problems with Consultants.

Ms Mxenge said three years ago the Cabinet took a decision on the need to evaluate Poverty Relief and this was how the decision to zero budget came about. She said that the Provincial and National Public Works Departments are separate entities but in terms of co-operative governance they do work with them.

Mr Solly Ngwanza (Department) responded that the Department is often asked who is responsible for what but it is true that the State of the Nation Address mentions the involvement of Public Works. Schools, roads and clinics are the domain of the Provinces while the core function of the National Department of Public Works is the maintenance of buildings.

Mr Windvoel said they know of these competencies but the issue is that the Department is the mother of all Public Works Departments. What are they doing about the political statements that are being made?

Rev Moatshe said that in addition he wanted to know how their allocation to the Provinces is done.

The Chairperson said the other problem is that the Committee is a cluster of three Departments because their MINMEC is a close one and they feel that Public Works should be the face of government. She said if their unable to answer any of the questions they should not feel uncomfortable.

Mr Ntsaluba said they have a Commonwealth grant that is meant to preserve graves that are earmarked by Cabinet and said the graves of combatants are definitely included. He also said that the Department is not a conduit of Provincial departments and the only Parliamentary allocation they get is for the building maintenance. Mr Ntsaluba said they will communicate in writing with Members on the question of property disposal.

He pointed out his earlier indication that R1.5 billion has been allocated to client Departments and they will work on project management and claim the money from them and this is what they call cost recovery mechanism. On the Assets Register he said in 1997 there was no register therefore there are no updates, only constructions.

Rev Moatshe said there must have been an asset register which was misplaced and the accountability function was compromised.

Ms B Thompson (ANC) said it is quite unfortunate that the Director General left the meeting before answering questions on the issues relating to the Provincial and National Department. On page 35 they refer to training and capacity building, but who does it refer to? If they are training emerging contractors why are they still using Siyazama? As public representatives, they cannot even provide answers when they are confronted by the public.

Mr MA Sulliman (ANC) referred to page 44 which says R2.2 Million has been allocated for parliamentary villages but only R1.2 was spent but their houses are in need of maintenance and when they raise this with the caretaker he always tells them that there is no money.

Ms ND Mntwanambi (ANC) said the Director General has commented that they do work with the District Councils. Which ones was he referring to she added that one piece of land in Simons Town Red Hill was promised for land Restitution purposes and there is nothing that is happening to show the seriousness about the commitment made.

Dr Nel (NNP) said when it comes to the maintenance backlog it is worrisome and one of the causes is insufficient funds. He also wanted to know in which manner they needed assistance from the Committ

The meeting was adjourned.