Processing of budget votes, Role Clarification, Department's Strategic Plan: briefings by Committee Secretary, Researcher and Content Advisor

Meeting report

In the absence of Mr B Martins (ANC), Mr F Adams (ANC) was elected chairperson for the day.  He greeted his fellow delegates, thanked them for placing their faith in him, and outlined the agenda for the day, stating there would be a presentation by the Committee Secretary, the Committee Researcher and the Content Advisor.

Presentation on Role Clarification
Ms Akhona Buthakwe, Committee Secretary, presented the Committee’s legacy report and outlined the responsibilities of the Committee’s personnel.  In 2013, a Committee planning and budget tool had been introduced which had been endorsed by both the National Assembly and National Council of Provinces. The Committee section staff had also been consulted on the tool, which was explained to everyone.  It was used to provide a structure for the Committee, providing uniformity with respect to the support provided to the Committee by Parliament, and was also meant to coordinate support services to ensure collaboration between the various sections, such as the research section and the Committee section of Parliament.  This would ensure these various sections were able to carry out their mandate and build efficient and effective teams to support the Committees. The tool aimed to increase the level of understanding of each other’s role for the benefit of the Committee and increase support for the team and increase the effectiveness of the Committee and its work. The Committee Secretary’s role was to provide procedural advice, in line with the rules of the National Assembly and to coordinate the overall activities of the Committee, ensuring that all activities were in line with the annual plan and that the Committee budgeted for their activities and monitored the budget.  She also provided reports on Committee meetings.

The role and duties of the Committee assistant were to provide administrative and logistical support in Committee meetings, to prepare applications for the meetings, as well as to ensure the safekeeping of Committee information.

She then outlined the role of the content advisor, Mr Shuaib Denyssen. His duties were to coordinate support for the Committee’s five-year strategic and annual plan, to ensure the alignment of the Committee’s term programmes, to monitor the achievement of the objectives of the Committee and to ensure quality assurance of all the Committees’ outputs, ensuring service delivery issues were addressed by the relevant Committees. He would also assist the Committee with oversights, providing subject knowledge and expertise to guide oversight and activities, review relevant documents and provide strategies for oversight, to monitor the achievement of pre-established departmental goals and evaluate and establish the impact of departmental plans or programmes.

The Executive Secretary (otherwise known as the Secretary to the Chairperson), Ms Fahija Osman, was responsible for preparing management meetings, taking minutes of the meetings and following up on decisions taken at those meetings.

Ms Buthakwe said the role and duties of the researcher was to provide a summary and analysis of any documents that came before the Committee, and produce research papers on issues emanating from deliberation. She also provided a summary and analysis with respect to various documents such as the State of the Nation Address (SONA), the annual performance plan and later the budget analysis.  She also produced papers on various topics as requested by the Committee.

Ms Buthakwe said that a communication officer would visit the Committee periodically but that there was no specific one assigned to the Committee.   However, they were available to assist with media and publications when the need arose -- for example, writing opinion pieces and providing media alert statements.

Discussion
Mr K Mubu (DA) asked the Chairperson for clarity on the difference between the Committee Secretary and the Executive Secretary

The Chairperson responded that the main difference was that the Executive Secretary was the secretary to the Chairperson, assigned to the Chairperson. 

Presentation on processing of budget votes
The Committee Secretary said that the Department’s executive authority was responsible for tabling strategic plans and/or annual performance plans before Parliament, after the tabling of the national budget. The tabling was announced in the publication called the Announcements, Tablings and Committee Reports. The documents were available electronically and they were most often given to Members every morning, though she was not sure if that was still the case. Once tabled, the electronic versions of the documents should be accessible to the Department via departmental websites and Parliament’s documentation office would provide hard copies. After tabling, the Speaker of the National Assembly referred the plans to the relevant Committees for reporting within a specific timeframe. Reporting was in terms of the National Assembly rule 137, and should take place before the debate on a particular vote. A portfolio committee’s report on a department or entity’s budget and strategic plans should be published in the Announcements, Tablings and Committee Reports before the debate on that vote. This was the same process followed by the Public Works Committee.

She informed Members that the Department of Public Works (DPW) would be coming to brief the Committee on their strategic plans and the annual performance plans.  However, due to time constraints, not all of the four entities reporting to this department would be able to make presentations on their own strategic and annual performance plans. She had been advised that if the chief executive officers (CEOs) or chief financial officers (CFOs) of those entities came to next week’s meeting so that they could establish the amounts allocated to those entities, they could then engage with the Committee accordingly in order to meet the deadline. The budget roll debate for the DPW’s request is scheduled for Wednesday, 16 July, and by then the Committee’s report would be in the Announcements, Tablings and Committee Reports.   The Committee should have finished its business before the debate and the different political parties would then decide among themselves which Members were going to debate and how it would be done, with the assistance of the support staff. The budget debates took place in extended public committees.

Once a strategic plan and/or annual performance plan had been referred to a portfolio committee, that committee had to develop a programme for consideration and report on the budget.  The process might include public participation through advertising for comment or invitations to specific stakeholders or groups, such as academic or research institutions of non-governmental organisations (NGOs).  However, there was no time for this. The process must include the analysis by the Parliamentary research and content support, the political overview by the relevant executive authority -- that is, the office of the Minister and the Deputy Minister, as well as briefings by the relevant accounting officers, scrutiny of the tabled documents, presentations and any other input.  This would be followed by Committee deliberations, the drafting and adoption of the Committee report, comprising a summary of the process followed, observations made, and a recommendation to the National Assembly as to whether the budget should be approved or not.

Potential challenges were the short period between the establishment of Committee programmes, the election of chairpersons and the extended public committees. The Department would have short notice of Committee programmes and would have little time to prepare for briefings. Members of committees would have little time to familiarise themselves with the portfolios they oversee, and with the relevant budgets, strategic plans and the associated responsibilities. There would be little opportunity for public comment. Where strategic and annual performance plans were tabled before the elections, in instances where departments have been merged, the relevant executive authority may decide to table revised plans, which might cause delays in the affected portfolio committees’ processes.  In turn, this might impact on reporting, but in the case of the DPW, it had stated that they would not be tabling a new strategic plan and annual performance plan, so what had been distributed was what had been tabled in the 4^th Parliament.   However, sometime in October the Department would make revisions to the strategic plan, a process which would be carried out collaboratively with the Committee.  Members would be more familiar with the programmes of the DPW by that time.

To address the time constraints, the Committee may consider receiving a broad overview of the Department’s budget vote and strategic or annual performance plan provided by the relevant executive authority or accounting officer.  This may be considered along with the relevant budget vote analyses by the Parliamentary research and content support, the budgetary review recommendations adopted in 2013, and any other relevant information the Committee had access to. The Committee may, based on the above mentioned information, adopt a report for tabling in the National Assembly. The Committee may choose to comment on the constraints it faces regarding the consideration of the budget.  This had been accommodated in the draft programme distributed to Members.  The researcher would take Members through some of the issues that had emanated -- for example, the Committee recommendations in the previous budget reviews, and where to focus when considering these strategic plans.

At the start of each term, committees were expected to develop five-year strategic plans that would form the basis for their oversight activities.  It was recommended that an orientation programme comprising, among others, a thorough scrutiny of departmental budgets and strategic annual performance plans be developed. Given the time constraints and the fact that many Members may be new to the portfolio, she proposed setting dates so the Committee could embark on a strategic planning session so that members could familiarise themselves with the programmes of the DPW and make decisions based on where to focus their energy over the next five years, based on the information provided by the content advisor.

Discussion
Mr S Jafta (AIC) expressed concern over the fact that there would be no time for public engagement, especially given their critical role and responsibility as representatives of the people. He feared the DPW would start off with a negative reputation as a result of this. He stated that while he understood the reasons for the time constraints, for example the recent elections, he felt that there was a need for creativity, to find a way to allow the community to comment to their activities, to allow them to express their opinion. He suggested turning to the media, or advertising in a national newspaper, so as to avoid unnecessary criticism.

Mr Mubu agreed with Mr Jafta and said he was also concerned about the short notice given to Members, especially new Members, to engage and scrutinise and familiarise themselves with the operations of committees regarding budgets and the process of budgeting and strategic plans and planning.   While there may not be enough time to engage with the public, there was definitely a need for a strategising session, otherwise it would defeat the purpose of going on oversights, especially considering this Department was faced with a lot of questions from the people, which had to be taken seriously or the Committee would be blamed in the future.

Ms P Adams (ANC) thanked the Committee Secretary for the presentations She asked whether the researcher would provide them with summaries and analysis of bills and legislation beforehand, because they were often very technical, so that the Members would have the knowledge to interrogate them beforehand.

Ms L Mjobo (ANC) asked for remarks from the Chairperson, before any more questions on clarity were asked.

Ms D Mathebe (ANC) seconded this plea to the Chairperson for clarity, given how many of the Members were on the Committee for the first time.  She asked for information on where they were going and where they had come from, and for strategic planning so that they were better able to carry out their duties and address questions from the public.

The Chairperson answered saying the Public Works committee was a very complex one, because it dealt with all the government’s assets and was the custodian of such assets. Further, it was one of those departments that the public tended to come down very hard on. The Department’s budgets had to be finished by end of July, otherwise the Committee would run into trouble.  Because of this, there was a request during training that for now one should just deal with the budget, because time was of the essence. Usually a day or two was set aside for the Committee to go through the annual performance plan and budget process thoroughly with the entities. The Committee was thoroughly briefed during these meetings, which were held outside of Parliament so as to be undisturbed. The researcher and the content advisor start the process by briefing the Committee, followed by a period of engagement with the Department and the entities, after which another meeting is held at which the Committee compiles a report and the public is invited to make comments.  In terms of the constitution, all Committee meetings must be open to the public.  However, in this particular instance the Committee actively invites comments from the public. The invitation is also extended to political parties, all interested persons -- including academics -- to address the study groups, to brief them and to engage with them so they can come back to the Committee with a holistic view to avoid situations whereby the Committee do not grapple with issues due to a lack of awareness and to allow greater transparency and accountability. Members should advise the Chairperson that they must have such a session.  Between October and November, the Committee would have another session -- the budget review recommendations process -- and Members would need to be fully informed and be ready and able to apply their minds to determine whether or not the Department needed more money.  This was because the mid-term review followed, and the Minister might propose giving the PWD extra money and the Committee would need to say whether or not it was necessary.  This is why the Committee need the staff to properly guide it through the process. He reminded Members that they should not just look holistically, but should also look at the government registers of municipalities and provinces to determine whether there was land anywhere -- in Limpopo, Mpumalanga or the Eastern Cape -- that had not been accounted for in the register. The Chairperson therefore emphasised that they should get the present cycle over with, in order to move forward, because the Budget Speech was on the July16 and if Members were to be able to participate, there was a lot of preparation to do.

He said consideration had to be given to those Members serving on more than one committee, but that in future there would be time to break away because every Committee had to have a strategic planning session in the beginning of the year -- either before the State of the Nation Address, or after -- for the Committee to go through everything, so that no decisions were made on the spur of the moment. An example of the challenges the Members may face in the coming months had occurred when he had served on a previous Committee.  They would go on oversights, and on one particular oversight, R40 million had been allocated to build a bridge, but when they got to the site there had been no bridge.  The contractor had argued that he was still waiting to be paid and the DPW had responded that they had paid and provided receipts as proof.   The contractor had then come up with various excuses to pardon his behaviour saying his computer was broken and so he had never received notification of payment.

He emphasised the importance of their work, saying they had oversight of national departments. The PWD worked with most contractors in South Africa and had to make sure they did their jobs well and that no money was wasted, because no other department worked with as many contractors as the PWD.  Therefore it was important that Members familiarise themselves with the documents coming and other issues facing the PWD.  For the sake of progress, Members should cross this hurdle and then they could go for their strategic planning session at a later date and get specialised people into the planning session to take the Committee members through the processes, outlining what they should look at.

Ms Mjobo thanked the Chairperson for clarity and asked if there would be time to go through oversight before the Budget Review and Recommendation Reports process.

The Chairperson said that as they had until September, he suggested that Members really had to go through the documentation provided, the strategic plan of the department and the presentation which would be made by the researcher.  The previous Committee did not get to certain oversight issues and this must not be continued.  They should prioritise their oversight visits and must go out to familiarise themselves because they could not speak with certainty if they did not know what was happening on the ground, or ensure what was being said was actually being done. Without oversight, contractors may abuse the funds allocated to them by the DPW. An example was where money had been allocated to develop cells for a police station and had been used to build a mansion for the contractor’s cousin.  Oversight was the best way to determine the fact of a situation or progress of a project. .

Mr Denyssen, Content Adviser, said that they should separate the time for strategic planning and the time for budget preparation, as there was a problem regarding strategic planning.  Departments had complained to the Department of Performance Monitoring and Evaluation about the time stresses that had been put on departments to develop their strategic plans and annual performance plans in time for the next mid-term planning deadline, and for that reason the actual date by which strategic plans for the new Medium Term Strategic Framework (MTSF) should be ready is 31 August of this year. He suggested that they carry on and develop a strategic framework and carry on doing their oversight and their work.  In his opinion, the Committee section of Parliament may come to such a decision and it would be better if it was under the guidance of the chair of chairs and executive leadership.

The Chairperson said the Committee was fortunate in that it had quite experienced staff, who were in their second term with the Portfolio Committee and so knew what to do.   He suggested that Mr Denyssen put a skeleton framework together and after the budget process they could get together again, propose it to the Chairperson and beef it up, so that by the time they had something concrete, the Committee would be ready.

Ms Inez Stephney, Committee Researcher, addressed the question of whether delegates would receive summaries of bills, and said that yes they would. She added that the Minister would send these out for public comment, prior to a bill being presented to Parliament.  The Committee had its own submissions that came from the public, and the call was made via newspapers, radio, television, any medium that could reach people, and those submissions would be analysed by the research unit in preparation for the bill.

The chairperson thanked the Committee Secretary for her presentation and introduced the Content Advisor.



Presentation by the Content Advisor, Mr Denyssen
Mr Denyssen started by addressing the concerns of Members regarding strategic planning.  His suggestion was merely a starting point for a strategic plan, and that the Committee should try to develop a strategic framework which would look at the DPW not just as a department, but as one part of a larger sector.  His presentation would deal with stakeholders of the sector, the DPW and its mandate, challenges around the concurrent function that the Committee would have to keep in mind, ideas towards a framework for oversight, and a little bit about multi-year planning to check on performance and some of the key source documents that will assist the Committee to check on performance.

In his view of the sector, society came first because it was where delivery should take place.  However, there were different ways in which people looked at society.  Some called it their client, some, their market.  The department came second after society, not including the entities that report to the Minister, because it was a strategic decision to take some responsibilities outside the Department and create an entity, which required reflection.  The third consideration was the four entities, which were The Council for the Built Environment, the Construction Industry Development Board, Agrément South Africa and the Independent Development Trust. The fourth was the construction industry and the fifth was property investment, property facilities management and the property retail industry. He had broken them up like that so the Committee could see that this Department had a much wider role to play than just being the Department of Public Works that made the claim that it made this country work.  It also had a role to play in changing every one of these components of the sector. He would henceforth refer to a sector instead of a department, and this department’s responsibilities to that sector, especially to society.

The Department’s mandate stated that it was the custodian of government immoveable assets, which referred not only to buildings, but also to land. The Committee must strategically consider how it worked with sister departments and sister committees, such as Land Reform and Rural Development and The National Council of Provinces. There were two descriptive characteristics to the DPW -- ‘strategic leader’ and ‘regulator’. It was the strategic leader of the construction industry and built environment. He was of the opinion that the Department should talk of itself in reality as being more of a regulator of the property investment, property facilities management and property retail industry.  They would achieve the status of strategic leader only if they could assist this Department’s portfolio committee to become closer to being a stronger agent for change, which he felt was of critical importance. The Construction and Built Environment was a large and complex sector.  It encompassed all of a very knowledgeable and skilled corps of architects and quantity surveyors, for which there was a big demand in the public sector.   He believed that this could be addressed by looking into the budget needed, in order to determine where money can perhaps be best directed away from certain functions.

There was a portion of the constitution which described public works as a “concurrent function,” meaning one had the same responsibility in two different places at the same time.  There was clarity on this matter, with the example of schedule four of the constitution which stated that the public works function is shared among the spheres of the government.

Ms Inez Stephney, Researcher, explained the schedule to Members, stating what it meant was that the national department’s functions in terms of roads and buildings, were scaled down to the provincial sphere, which was why the Department had 11 regional offices to facilitate this.

Mr Denyssen continued to outline the differences between the regional offices and the provincial departments. He said that the provinces had no control over the regional offices, as they fell straight under the national department. This allowed the national office to have a foothold in the provincial sphere and do quite a lot of work -- they played a role in Parliament and Robben Island in the Western Cape, as well as small harbours such as Kalk Bay. They also played a role in water wastage and recycling, most likely in collaboration with the provincial department.  Whilst the work may sound daunting the Committee would support each other as a team through their efforts. There was a need for the Committee to be clear as to where to draw the line, and when to hand over to the National Council of Provinces.  They would need to be mindful of this as they headed into their strategic planning process.

He went on to give some ideas which he felt should be part of their framework, both with respect to oversight and legislation. Strategically, the questions “what, how and when” should be asked. Ms Stephney would outline the ‘what’ -- what had been done since 2009 up to last year in the budget. While they would not go over the document in the meeting, it was very useful as it identified weaknesses that formed part of the nodes of the delivery aspect of public works, where he believed policy implementation should have an impact. He was not suggesting, that they did oversight over a department that delivered services in society in the same way that social development did, but that weaknesses in the DPW had an effect on housing, health and other departments.

The “how’ component could be addressed by being creative.  Should the Committee feel equipped enough at a later stage, they could possibly be divided into teams and sent out to do oversight in different areas at the same time.  In addition to this, the other aspect of the ‘how’ was to ensure the Committee had collaborative meetings with sister portfolio committees -- for example, the Land Reform and Rural Development Committee and committees in the National Council of Provinces. These visits were important because they highlighted crucial weaknesses for National Assembly committees.

The ‘when’ aspect would be determined as per the regulatory framework for government and Parliament.

Mr Denyssen said that Parliament, as part of government in the last administration, referred to itself as an “activist parliament” -- a vision developed through a strategic planning session of Parliament as an institution, guided by the leadership of the presiding officers. This process had not been completed for the 5^th parliament, and so therefore the Committee must bear in mind that its strategic plan must align with the vision and mission of Parliament.

Government followed a multi-year planning and performance cycle, hence the talk about medium-term expenditure frameworks. The most important building bricks of these were the performance indicators that a department or entity decided it had to check on. These performance indicators had to be specifically defined. The department must generate quarterly reports to send to Treasury. These reports contained performance information that reflected predetermined policy goals, and properly defined performance indicators that were then measurable against the money and resources that had been appropriated for it.

The quarterly reports assessed impacts reported on and challenges noted, which then fed into targets for the following year.  However it was possible to check on the target only if the performance indicator was properly defined. In the DPW there were often indicators that were not properly defined and so checkscould not be done on them. This was something to be kept in mind.

Mr Denyssen said he felt they must stand united to request for better monitoring and evaluation systems. A performance information monitoring and evaluation office or unit should operate from the office of the Director General that timeously released reports to the Portfolio Committee.  This did not happen often enough and the reports were available to the Committee far too late.  However, the Committee should be seen as part of the engine that changed this Department.  If there was a monitoring and evaluation office, it must be reconfigured so that it could function properly. Secondly reports were important so that the Committee did not have to wait till September to start on its budgetary reports, allowing it to be pre-emptive instead of reactive, and allowing them to work more quickly and sharply and in a more excellent way. There was a medium-term strategic framework that was important, and departments and the committee should be well informed about it.  The research unit did that, and the 2015/2020 strategic plans would be completed in August and November of this year.  The Committee did not have to wait for that, as there was the previous document that it could refer to as well as the State of the Nation Address (SONA) that indicated quite a few things that it could start to work on.  Both SONA and the national development plan could be used as material to influence the Committee’s strategic plan, as well as the strategic plan for last three financial years, analysis of annual reports over the last three financial years and analysis of weaknesses, and whether there were strengths from the Budget Review and Recommendation Reports, and Treasury’s responses to those recommendations. There were also recommendations by the Financial and Fiscal Commission on a budget vote.   There was a weakness in the financial and fiscal analysis of the medium term budget statement, as the document did not provide sufficient information about the ‘how’, and this is something that the Committee needed to determine.

Discussion
Mr Mubu said the information provided was very useful, especially for new members of the Committee.  He asked about the entities that reported to the DPW, how they were constituted, who appointed the boards and what role Parliament played in determining who sits on these boards.  He said he had heard a lot about the Construction Industry Development Board, which was surrounded by controversy.

Ms Adams thanked Mr Denyssen for the very good presentation.  In her opinion, there was definite need for skills development especially in the Council for the Built Environment and the Construction Industry Development Board.  She asked whether the DPW played a role in the development of these skills -- for example, did they provide any incentive for people to learn these skills, like bursaries for civil engineers, quantity surveyors and the like. Was there a performance information and evaluation office, emphasizing the importance of those in a department such as Public Works?

Ms Mathebe asked for clarity on the linkage of regional, provincial and district, with respect to who was reporting to whom?

Ms Adams asked if it was possible for the Committee to see the response from Treasury on the performance of the Budget Review and Recommendation Reports of the Department, and when there would be a reliable asset register. Did the Committee have access to registers of municipalities?

Mr M Filtane (UDM) referred to a document the research unit dealing with the summary and analysis of vote 7, which stated that coordinating and providing strategic leadership in job creation initiatives, through the implementation of the Expanded Public Works Programme, was one of the mandates of the Department. He thus found it puzzling that there were hardly any African construction companies that had enough experience to take on major construction work, especially compared to the big five companies that the government usually relied on.  He asked how the Department proposed to endorse the qualifications of Africans in the construction industry so that they could also access the contracts issued by the government.  Such endorsement would entail job creation.  He said that the sole purpose of government was to bring about a social balance, and where government did not deliver on this it was failing to honour its principal responsibility. He felt the Committee must also endeavour to address the criticism that jobs within the Public Works programme were both low-paid and short-term, in order to ensure they created a good legacy for the 5th Parliament.

The Chairperson supported Mr Filtane’s assertion and called on other Members to comment.

Mr Denyssen responded to the question on the issue of the Construction Industry Development Board, which manages the register of the construction industry and grades it.  Emerging construction companies, youth and women constructors and the vulnerable sector remain the minority on the register, hence the need for a focus on transformation. This sector had always been controlled by the “upper class” and remained racially skewed.  There was a sector within this sector that called itself the Master Builders’ Association, which was a private group with most of its members right at the top of the register.

Regarding the issue of the immoveable assets register and the availability of deeds registries, all information was available by way of the Promotion of Access to Information Act, provided it was not information critical to state security. Every sphere, while it remained independent, was also interdependent. The Minister was the custodian and had control. The question on linkages was related to schedule four as well. As for who answers to whom, one reported to one’s Minister in that particular sector. Further Parliament could call anyone to come and give evidence about their work to this Committee, although there was an inter-governmental relations act that stipulated that one must make certain that when one stepped over into other spheres, one must do so in a respectful way. The role the Department played in respect of the CIBD and other such entities -- their mandates and what they are -- is guided in each instance by an Act. The question about the boards and the appointment of the chairpersons was a ministerial function.

Ms Stephney agreed that the Minister appoints the boards, but the previous Portfolio Committee had said they wanted to have a say on this, so this may be something the current Portfolio Committee could follow up on. In terms of the Council for the Built Environment, the CIDB and skills development, the CIBD does offer bursaries to students.  They also have a math and science week, where they go to schools and introduce themselves to schools.  They also have mentors for grades 11-12.  The CIDB does not necessarily provide skills in the sense that the Member implied, but it did attempt to regulate the contractors. It had a register of contractors -- at last count, they had over 92 000 -- but the problem was that the majority of these contractors, which range from grade one to nine (grade one is entry level and grade nine are the major ones like Murray and Roberts), were at the bottom of the scale.  Those at level one tended to get stuck there and had a lot of difficulty in moving because they required evidence of past work completed and capital resources, all of which prevented them from actually moving forward.  Furthermore, the size of contract they can tender for is quite low.  A grade two contractor can tender for about R200 000 to build maybe a classroom, but the level nine contractor can tender for contracts over R300 million, up to R1 billion. More needed to be done to ensure support for those entry level contractors, which would be small SMEs and which could also have been affected negatively by collusion in the construction industry. The Competition Commission did present a report last year to the Committee on the effects that the collusion has had on emerging contractors, and that was something the Committee had wanted to keep an eye on in terms of addressing it. They had asked for follow up reports from the Commission on its investigations. The report given at the time indicated that the Commission had not finalised the actual loss to the state, but a few of the big companies had settled with the Commission and provided information on other companies that had colluded, and the loss to the state was conservatively estimated at over R20 billion.  These companies had paid only R1,49 billion as a group, and this was an issue that should be kept to the fore.

A reliable asset register should be completed by the end of 2014, and they had brought in consultants (Ernst and Young) to do this.  The Department had indicated that they were on track and this is one of the issues the Committee would receive further clarity on.   One of the issues that the Committee wanted Members to keep an eye on was the kind of contract the DPW entered into with Ernst and Young, especially in terms of the intellectual property -- the actual register needs to be handed over to the Department, and Ernst and Young may not retain a copy. This was critical.  

In terms of the Expanded Public Works Programme (EPWP), this was the third phase of the programme.  The first was started in 2004 and reached its target in 2008, creating 1,3 million work opportunities.   The phase just completed, having started in 2009, had created 4,1 million work opportunities, but had not reached its target of 4,5 million.   The third phase wants to create 6 million work opportunities, and that will be one of the issues where the Department would have to explain how they were going to reach it.

With reference to the duration of the work that the programme offered, the Committee had suggested that there were different sectors that should take part in the EPWP -- the infrastructure one, and the social one.  The infrastructure one has the largest target, because it is under the DPW and the Department can actually control that aspect.   One of the issues that the DPW had raised was that even though it was supposed to coordinate the EPWP, it did not have authority over other departments to insist that they actually undertake EPWP projects. More sustainable jobs could be created in the social sector and the cultural sector. The social sector was the basis of home-based care and early child development, and these were areas that could be sustainable and where people could be skilled. However, the Department had admitted that this was a juggling act, as there were multiple large infrastructure projects, but the large infrastructure contractors often refused to have certain people on their projects -- for example, people with disabilities.   The EPWP had a 2% target for disabled people to take part in public works projects, but during the last two phases they had not reached this target because these construction companies were not open to having people with disabilities on a construction site because they think of it in terms of the extreme --a person in a wheelchair -- and this was something they have been informed by the Committee that they must rethink.

Further the previous Committee had recommended that when the Department enters into a contract with these large companies, they must specify in the initial tender document the requirements of the project and the public works aspect of labour intensity and skills development, because this is another aspect that has not been consistent on these projects.  

In terms of the shortage of critical skills, this comes from many areas, one of which is the Council for the Built Environment.  For example, engineers have difficulty in becoming certified because they are not being properly mentored in their experiential learning placements. The Built Environment Professions Bill seeks to look at these issues and the transformation of the built environment.

The Chairperson addressed the question on who appoints the boards, stating most boards have been established in terms of Acts.  The Minister has the power to appoint the boards and he, out of courtesy and goodwill, informs the Committee of such appointments.  Previously the Committee used to send letters endorsing certain people for appointment, or the Minister would ask the Committee if they knew anyone in the industry who would be suitable for appointment to such a board. That arrangement should still be ongoing,

Mr Denyssen said that the Budget Review and Recommendation Reports, and Treasury’s responses to it, were indeed available to Members

The Chairperson said with respect to Budget Review and Recommendation Reports, the budget office of parliament was established only in recent years. Prior to that, there was never an engagement for the portfolio committees specifically to deal with the budget. The Committee could only make recommendations which went to the budget office, which then went to Treasury, who had the final say. It might be approved, rejected or reduced. He thus recommended that the Members read the Appropriations Committee’s report to familiarise themselves with the spending patterns of departments, because the Appropriations Committee could call any department -- provincial or national -- and demand to know why they had underspent on certain issues.  It was therefore important for the Committee to engage with Human Settlements, Education, Police, and Correctional Services and also to look closely in constituencies with municipalities, because national government gave grants to municipalities to implement DPW programmes, and some municipalities did not use those grants for what they were intended, and claimed that the DPW had not specified what the money was meant for. He further encouraged the Members to employ the services of the support staff to seek clarity if they needed it.  They must all assist each other and work smarter in order to leave a good legacy.

Mr Filtane thanked the support staff for the lucid and honest answers they had given to his previous question. He asked whether there were any written down specific standards that guided the conduct of oversight, such as what to look for.  Were there any guidelines as to how the Committee should play its role? He also asked if it was possible for Parliament to come up with ways to provide up and coming contractors with experiential opportunities, giving an example of a trip taken in 2005 to Gauteng where they were introduced to a programme where they would take people off the streets and put them on a mentorship programme for as long as 18 months.   During this period, they would be given an opportunity to engage with all the stake holders that were relevant in that particular sector so that they gained practical and administrative experience. as well as technical experience. He suggested that alternatively they could find training for them elsewhere, citing the activities of the Health Department in sending people to train oversees to solve the issue of the lack of skilled personnel in that sphere. If this was not addressed, equality would never have been achieved.  Issuing fines was not the right way to address this issue -- it was ineffective, and there should be a law removing fines and imposing direct imprisonment, otherwise transgressors would not feel the sting of breaking the law.

The Chairperson responded that the previous administration had done well by imposing punishments for transgressors, including their being blacklisted from doing any future work with government. There was a register of such transgressors that the Treasury had drawn up, but the Committee should push this agenda more strongly. What often happened was that the construction companies in the rural areas were being fronted, finding a local to sign their name on some documents and then pay them very little while they, the foreign company, makes a huge profit.

Mr Denyssen said they should proceed with caution on the issue of experiential knowledge, as they did not have all the details on that matter.  On standards for oversight, he said there were no specific standards, as it varied depending on what the objective was for a particular project.  Members would always be duly prepared for oversight visits.  For instance, for a visit to a site to look at building regulation issues, they would certainly make sure that members have the ISO standards of building regulations. The standard was something that the Committee set itself, and prior to each oversight they would note what they would like to get out of it.

The Chairperson added that the Committee would be guided by the supporting staff when conducting oversights. They would receive documentation to outline where attention should be paid to when on an oversight, saying it wass important that they work as team to better the lives of the people and to get value for their money

Ms Mjobo, referring to what had been said about having the right to call anyone before the Committee, asked how this would work in actuality.

The Chairperson said that it was their constitutional right to summon anyone to come before the Committee.  For example, if the Committee went on an oversight visit and found that work had not been done as it was supposed to have been, the contractor could be called to Cape Town. He emphasised the point that the Portfolio Committee was an extension of Parliament and that the rules of Parliament could still be enforced even when one had stepped outside the seat of Parliament.

Presentation by Ms I Stephney, Researcher
Ms Inez Stephney directed Members to the orientation papers for the fifth parliament Portfolio Committee on Public Works, where there was a summary and analysis of the Department vote, which was the topic of her presentation.   There was a five-year review of the Portfolio Committee’s work in relation to the Department.  With respect to the Member’s question regarding experiential training, the DPW had a programme called the Contractor Incubator Programme, where a group of people were chosen and trained in finance for about 18 months, and from there the Department tried to help them get a tender through which they were mentored to ensure that when they fulfilled it, the product was satisfactory.

The orientation document had a lot of information regarding international instruments that the Committee must oversee -- for example, the agreement between the government of the Republic of South Africa and the government of the Republic of Cuba. The Republic of South Africa had actually employed Cuban technical advisors who had been placed in the provinces and municipalities to assist with bringing the engineers in these departments up to par.

She said she had called the next portion of her presentation “issues for consideration in the 5^th Parliament,” because she had looked at the department’s budget and at what issues came up and the reason for a specific amount to be assigned to a specific area. This document would go together with summary of the analysis of vote seven of the DPW.

In terms of the entities that report to the DPW -- Agrément South Africa, The Council for the Built Environment, The Construction Industry Board and the Independent Development Trust -- Agrément was constituted in 1969 under ministerial determination.  The reason for this was that goods which were unsafe were brought into the country, and so this entity was created to ensure public safety. The CIBD and Council for the Built Environment were schedule three entities, meaning they received funding from government. For this financial year, the CIDB will receive R77.2 million to do its work, and the Council for the Built Environment will receive R41.6 million. Agrément is the smallest entity but it does quite a lot of work and receives money from the Department.  It will receive R11.1 million this financial cycle. Mr Denyssen mentioned something about the entities being in trouble from time to time, but this entity has never been in trouble it has had a clean audit for the past seven or so years. The Independent Development Trust was a schedule two entity, and is not supposed to get money from government.  It was conceived in 1990 and received a grant of R2 billion to do its work.  However it had indicated to the Committee two or three years ago that its capital base had been depleted, so it would now be receiving funding for operating expenses.  It had received R50 million this year.

Ms Stephney went on to speak about the Department’s turnaround strategy, stating that the funding was for the activities of the Special Investigations Unit, the technical support unit, a clean-ordered project, internal audit support and additional functions.  The Department had had a troubled history in terms of procurement issues and mismanagement of finances, which was the reason for this turnaround strategy. The internal audit support and the finance and supply chain management units were key to the financial stability of the Department and had been its key weakness repeatedly from 2003 to 2009, as had been shown in the Auditor General’s reports.  The turnaround strategy had a phased approach.  The first phase was to stabilise the Department by appointing a permanent director general.  In the past, the department had struggled with permanent stability at the top, as even the ministers had changed often in the past five years, and this had not assisted the Department to resolve its issues.   Furthermore, the deputy director general positions were empty especially in the areas of immoveable asset management and the inner city regeneration, which were key areas for a stable and reliable immoveable asset register. The department was currently engaging consultants, but had indicated that using these consultants must eventually come to an end, so the budget for the consultants was being reduced on a yearly basis, as they were expected to transfer their skills.

Members could request clarity from the Department on the immoveable assets register when they present next week. She had also included the maintenance budget here, to try and respond to the issue of sustainable jobs. The Department needed around R20 billion to maintain its assets, but it received only R1.6 billion for this financial year so when Members met the Department, they could ask how they were managing with such a small maintenance budget. Also in terms of maintenance, there was a national youth service launched in 2007 to provide for skills development for youth so they could be trained to maintain government buildings.  It had been a challenge to implement this project and the Department should try and strengthen it as part of its job creation strategy.

The Department had received received a R6.1 billion budget for 2014/15 to do its work.  In the previous year it had received R 6.2 billion, but if one considered inflation, the amount they have lost out on is R411 million in terms of the value of the money. The immoveable asset management budget was the key programme for the Department, as it looks at its assets, maintenance, rehabilitation, and construction. This was followed by the Expanded Public Works Programme, which received the largest portion of the budget. There were two other programmes -- the property construction industry policy regulation and the auxiliary and associative services programme. The former was where policy resided, where most of the work got done, but they also did not have an acting Deputy Director General, so this was something that needed to be strengthened. The auxiliary and associative services was a programme that involved job creation as well as state functions and the Commonwealth war graves maintenance programme. These are graves in other countries across the world, such as France, and the Department contributes towards their maintenance.

The issues for consideration were that many departments say they do not receive enough money, but that is something the Department can answer in terms of the need of money for its maintenance programme.  Additional money for its associated services programme may be needed because when the Department receives money for the Commonwealth war graves, it pays it in another currency so when the exchange rate fluctuates they can not anticipate this, and may have to request additional funding from National Treasury and may get penalised because it seems as though they did not plan properly.

The big issue was human resources in the Department. As of last year, the Department had 6 705 positions, but only 5 594 were filled. Ever since 2008, the Department had between 800 and 1000 vacant positions to fill each year. The current vacancy rate was about 600. One reason for this was that they lost skilled personnel, for example architects, where they needed nine but had 17 vacant positions.  They also need engineers -- they say they need 123 engineers, but that was surely a conservative estimate. Skilled personnel was lost to the private sector cause the public sector salary was less than what the private sector could, offer and the Department could not compete. Another problem was an aging skilled personnel -- over the last three years, between 70 and 90 people had retired from the Department annually and it had attempted to recall these retired professionals so they could be mentors in the Department. The department would need to bring to the Committee its skills audit, which should outline what they have, what they need, and in which areas they need more personnel.

She felt the immoveable asset register had been poorly managed in the past, but that it was better regulated now. The portfolio managed 2 850 lease agreements and the allocation for these leases was close to R3.2 billion.   It was only last year that the Department had managed to establish how many, and what, leases it has, and which needed to be terminated etc.  In terms of unoccupied buildings and monthly leases, user departments did not tell the DPW what their needs were a year in advance, as required. This is why the Department was unable to keep track of its leases.  Sometimes departments just packed up and left when they found premises they liked better, without informing the DPW.

In terms of accessibility, people with disabilities must have access to all government buildings and that had to do with service delivery.  She gave the example that if someone needed to collect their ID from Home Affairs, they needed to be able to access the building and the departments within it. Therefore all government buildings must be made accessible to people with disabilities. The Department reported making 11 buildings accessible in the previous financial year, so with an immoveable asset property register of about 70 000 buildings, this was another area where many jobs could be created.

The department also released land for both human resettlement and land reform purposes. Another thing about client departments was that they did not always pay their rental on time.  For example, the overdraft for the Property Management Trading Entity last year was R1.4 billion. The EPWP sectors were infrastructure, social environment and culture, and the non-state sector – which was the one where one got community-based organisations forming part of the EPWP, although sometimes the Department found it very difficult to have these areas participate.  Despite this, the non-state sector did very well by exceeding its targets, while under the infrastructure sector, the use of labour intensive methods assisted in job creation.

One of the issues the Department had found is that Agrément has certified unconventional products that can be used to build faster and cheaper, and these products were being used in the mud schools programme to address the challenge of mud schools and unsafe structures. However, building faster and cheaper challenged the EPWP aspect of labour intensity, so a balance must be found between these two needs. There was a need to address the backlog in mud schools, but one also had to create six million work opportunities.

Municipalities had gradually managed to take part in the EPWP, although municipalities without their own funds had been unable to take part in the previous phase of the programme.  This issue had been brought to the attention of the Committee during oversight, and when the Committee returned, they had changed the scheduling of the EPWP so that these low capacity municipalities could have an upfront allocation of 40% and then create the work opportunity.  Once they report, they receive the first of a two-phased allocation.  This highlighted the importance of oversight.  There were specific targets for women, youth and people with disabilities, and these were exceeded for women and youth who participated in the second phase of the EPWP. One of the reasons that people with disabilities gave for not taking part in the Programme was that they feared losing their grant for receiving a grant and money from the EPWP.  This is an issue the EPWP unit in the Department has looked in to.

The Department can not tell other departments what to do and sometimes the reports these departments provide are inadequate. There is a template, but there have been calls for a standardised template to make it easier for them to report.  At the a provincial level, there is the access roads project, which employs women and is one of the employment drivers, provided the provinces do not implement the projects according to their improved business plans, which do not use labour intensity as much. The materials that Agrément SA certifies are construction materials, e.g. thermal controlled buildings.  Basically that is the material used, aside from brick, to regulate the temperature of a building and save on energy so there is no need for heaters or air conditioning. Another one of the materials they have certified are the JoJo tanks -- the huge green water retention tanks. This has allowed for some of the areas which do not have quick access to water to improve that access by retaining rain water.

Ms Stephney went on to make suggestions on where the Department should focus its energy.  One such suggestion was to reopen Public Works workshops, as this was where artisan training used to take place in the past.  Another suggestion was to improve on the planning aspect, as some municipalities make the argument that when they have received money they were not informed as to what it was for. This could possibly be attended to by way of workshops. As for extending the mandate of Agrément South Africa to include the investigation of imports, this came from oversight again.  Agrément said they could certify but not investigate, but if their mandate were extended, they could do it.

Discussion
Ms Adams asked why it was necessary for the Department to appoint staff, when there was staff already. She emphasised that there had to be continuous passing of skills from the older generation to the younger. She asked whether the DPW was able to measure whether the consultants engaged by the Department transferred their skills.  Did the Department look at international best practises with regards to its programmes?  Did the decrease in the budget from 2013/2014 to 2014/2015 impact on service delivery?  The real decrease should be focused on, as it was that which affected lives. She further asks how far along the Department was with the national youth service and skills development.

Ms Mjobo said she needed the Department to provide further clarity as she did not feel the researcher would be able to properly address the questions that she had.  The Committee needed to be aware about what was going on -- for example, on the issues of vacancies, and the percentage of people retiring annually.

Mr Filtane wanted to know why men were excluded from the EPWP and whether anyone had done a study on the social and economic impact of this exclusion. His other question was about the mismanagement of leases, and whether the Department had had any recourse with regard to the offending officials, as this had contributed a total revenue loss of about R2 billion, and this could not be allowed to go on. Furthermore, what was the effect of housing the Special Investigation Unit (SIU) within the Department in respect of quality assurance, and what was the political significance of maintaining World War 1 graves?

Mr S Masango (DA) asked whether the Expanded Public Works Programme’s job target of 6 million reflected the people who had benefitted from the programme, or the people who were presently working.

The Chairperson concluded by saying that today’s meeting was to prepare the Members for next week’s meeting with the Department and that most of the questions raised would most likely be best answered next week, because the Department would be in a better position to answer them. He offered his thanks and a few last words of encouragement to the new Committee.