Thusong Centres repositioning & funding; Public Service accommodation by DPW; with Deputy Minister

Meeting report

Thusong Centre funding model: Department Public Service and Administration (DPSA) briefing
Ms Colette Clark, DDG: Research and Policy Analysis, and Ms Lynette Sing, Chief Director: Integrated Public Service Administration Reform, presented their study on the Thusong Centre Funding Model, after being introduced by DPSA Director General, Mr Mashwahle Diphofa,

Ms Clark indicated that functional responsibility for the co-ordination of the Thusong Programme is the GCIS. Cabinet had mandated an Inter-departmental Steering Committee with the responsibility of contributing toward the repositioning of the Thusong Service Centre (TSC) Programme. It had to provide evidence-based recommendations on the most suitable arrangement for oversight and coordination of the Thusong programme and funding options.  A draft report has been completed, tabled at Cabinet and will be undergoing consultations at ministerial level. The 2016 proposals for national optimum provisioning were: 178 Thusong Service Centres, 165 Thusong Service Clusters and 67 proposed locations. Of the proposed 67 locations, only 25 cases are new ones as the other 42 locations already have some departments present, but it is not a complete cluster. By adding departments, clusters could be established. This could provide cost saving and greater convenience. 11 Local municipalities that did not have a TSC will benefit from a TSC
The remainder will receive services from centres in adjacent municipalities and the deployment of satellite offices and mobiles could address the need. Ms Clark highlighted the critical success factors for governance of the Thusong Service Centres.

Ms Sing spoke to the financial analysis study of the Thusong Service Centres. There were coordination challenges at local levels with the Office of the Premier (OTP) and Department of Cooperative Governance and Traditional Affairs (COGTA); local buy-in challenges from stakeholders and funding challenges. There were three funding options available: 1. Cost recovery supplemented by continuous grant funding; 2. Cost recovery supplemented by grant funding for an initial period of three years; 3. Top Slicing where service departments are levied at national level for their occupancy at Thusong centres across the country. This funding would then be distributed to local municipalities and earmarked for the Thusong programme.

A situational analysis at the provincial level showed that Mpumalanga, KwaZulu-Natal and Western Cape received some rental income and were coordinated by the Department of Cooperative Governance and Traditional Affairs (COGTA). Gauteng, Free State, North West, Eastern Cape, Limpopo and Northern Cape were coordinated by the Office of the Premier. However Gauteng Eastern Cape and Limpopo received some rental income while the other two provinces did not receive any rental income.

The financial analysis study recommended:
• COGTA should serve as the lead department at provincial levels;
• the lead department should cover costs where local municipalities are not in a financial position to contribute to the operation of Thusong Service Centres;
• cost recovery from service departments should cover all basic operational costs;
• grant funding from national level should be available for a minimum of three years.
Consequently the study group opted for funding option 2 which allowed for cost recovery supplemented by grant funding for an initial period of 3 years.

Ms Clark concluded by speaking about the way forward for Thusong Service Centres (see document).

Discussion
Ms R Lesoma (ANC) remarked that DPSA had failed the Thusong Service Centres project therefore DPSA was shifting the responsibility to other departments. She observed that the world had evolved but the Thusong Service Centres project was struggling to catch up with new world trends because the Executive Authority took time to respond to new trends. She asked the DPSA research team why it had not considered information technology and reskilling of the Public Service in its report. She asked the team to state the characteristics it used to identify the 183 Thusong Centres established across the country as at 2015/16.

Ms D Van Der Walt (DA) expressed concern about duplication in the typology used for the Thusong Service Centre Model e.g. physical buildings and mobile service centres. Her other concerns were staff members that were not dedicated and when staff members were dedicated, there was a lack of materials. In addition since municipalities lacked funds and the Thusong Service Centre was not its priority, none of the officials were taking responsibility for providing amenities and maintenance of the centres. Therefore DPSA needed to provide a funding model that municipalities could apply to make Thusong Service Centres serviceable.

Mr S Motau (DA) asked DPSA to state a timeframe for the full operation of the Thusong Service Centres.

Mr M Ntombela (ANC) agreed with Ms Van Der Walt and asked DPSA to state the involvement of the municipalities and provinces in the resolutions presented by the DPSA team.

The Chairperson supported Ms Lesoma’s comment about the late response of the Executive Authority to improve the services of Thusong Service Centres based on world trends. DPSA had attached a budget for funding the Thusong Service Centres so the team needed to state when the research started and the methodology used to arrive at this estimated budget and recommendations for funding Thusong Service Centres. She observed that the report did not address issues picked up by Committee during its oversight visit such as lack of maintenance of Thusong facilities and poorly managed lease agreements. She welcomed the Deputy Minister and advised the DPSA research team to schedule a consultative workshop where the Thusong managers and South African Local Government Association (SALGA) could give a report on challenges. The consultative meeting could give recommendations that might not need the options stated by the team and could lead to use of community property at only maintenance costs. She invited the Deputy Minister to react to the suggestions and instruct DPSA to host the consultative workshop.

The Deputy Minister, Dipuo Letsatsi-Duba, thanked the Committee for its contribution but expressed frustration about the Thusong budget allocation. She made a commitment that DPSA would act on the suggestions of the Committee to ensure that there was an improvement on Thusong operations.

The Chairperson remarked that after the consultative workshop, DPSA might find that different funding models should be used for different provinces; hence the consultative workshop should involve COGTA, SALGA and other stakeholders.

Ms Lesoma requested the DPSA give a written response about the hosting of the consultative workshop, their concerns and questions.

The Chairperson agreed.

The Director General agreed to this based on the Deputy Minister’s response.

Facilities Management of Public Service properties: Public Works (DPW) briefing
The Chairperson asked that the presentation focus on the management and quality of government facilities. She also said that DPW should ensure that government buildings are accessible to people with disabilities.

Public Works Director General, Mr Jacob Maroga, spoke on facilities management while the Acting Deputy Director General (DDG), Mr Mandla Sithole, briefed the Committee on lease management (see document).

Mr Jacob said that DPW had embarked on a turnaround strategy since 2012 based on responses received from clients of DPW accommodation facilities. As a result the Property Management Trading Entity (PMTE) had been formed to address the regulatory and implementation functions of DPW. The key outputs of the facility management systems were: management strategy, the Green building programme and skills development. Maintenance of the facilities was achieved through proactive and reactive maintenance programmes however maintenance programmes where presently mainly reactive which had consequences. The facility management turnaround involved starting from a zero base in January 2016, stabilization programmes and a new delivery model. Key intervention themes for the turnaround were expenditure management, accruals, audit outcomes, business process review, the improvement of information and communication technology facilities and the focus on an initial 300 priority facilities. He noted the challenges encountered on day to day maintenance, using Pretoria as a case study, and the focus areas of the initial 300 priority facilities of DPW.

Discussion
Ms Van Der Walt expressed concerns on how the Green building programme would affect old buildings. She asked how it dealt with maintenance of essential services buildings such as hospitals and schools.

Ms Lesoma spoke about the damage caused by not paying service providers within 30 days and asked for a written progress response on DPW 30 day payment of service providers. She asked about its role in maintaining buildings occupied by frontline service entities and its role in leasing of buildings to the Public Service.

In reply to the Chairperson asking the Director General of the Public Service Commission if wanted to make any comments about the Public Service Commission accommodation, Dr Dovhani Mamphiswana declined.

The Chairperson remarked that DPW had failed in using properties in the Public Service as a tourist attraction and asked the DG to clarify the total value of the properties in the Public Service. She asked if the DPW had a strategy to analyse depreciation of government property and if it had an information technology platform to manage the properties in the Public Service.

Mr Maroga replied that public buildings had an emotional value and acknowledged the Chairperson’s comment on the failure of DPW to use public buildings as a tourist attraction. He stated that under the Green building programme only water, electrical and waste management maintenance were carried out for old buildings while the Green building programme for new buildings did not have a limit. The maintenance of essential services buildings such as hospitals and schools were divided into National and provincial Public Works. The schools and hospitals referred to were under the province however the DPW has a standard rate for maintenance. DPW is focused on getting service providers paid within 30 days; however, DPW has some challenges which are being addressed. DPW plays a big role in the maintenance of frontline properties such as Home Affairs, the Courts and South African Police Service.

Ms Lesoma expressed concern that multi-national service providers that offered technical services to the Public Service did not transfer skills to South Africans and asked if this was being addressed in the contracts signed with these service providers.

Mr Maroga replied that phased developments on Thusong Service Centres were carried out by an arm of the DPW particularly in the rural areas. The value of facilities in the Public Service was low due to market value and the DPW had an overview of the conditions of properties in the Public Service. DPW is implementing an information technology platform using ARCHIBUS Software which deals with maintenance, call centre, lease, and property management.

The Chairperson instructed DPW to give specific information on the state of maintenance of all provincial and national properties in the Public Service in writing. She also asked for specific details on the state of accessibility of government buildings for people with disabilities.

Mr Maroga replied that DPW would give detailed information on the state of accessibility of government buildings to people living with disabilities in a written form.

The Chairperson remarked that the Committee needed specific information on the compliance rate of government buildings for people with disabilities. She also for a time frame for DPW response all issues raised.

Mr Maroga replied that DPW would give detailed information on all the issues raised in the next two months.

Ms W Newhoudt-Druchem (ANC) asked about the responsibility of DPW in renovating two hostel buildings that got burnt at a school attended by pupils with disabilities.

Mr Y Cassim (DA) noted that the Nelson Mandela Bay technical and vocational education and training (TVET) College had applied to use a government building that had been empty for some time for its college activity but due to bureaucracy use of the building had not been approved. He asked DPW to state the efforts it used to avoid such bureaucracy in using buildings that had been left unused for some time.

The Chairperson resolved that DPW should address all the questions in a written form.

Lease Management of Public Service properties: DPW briefing
DPW Acting Deputy Director General, Mr Mandla Sithole, reported that National Treasury had accepted DPW strategy on how to procure properties. Presently the circulation of this strategy to national and provincial levels of government was at an advanced stage. The major challenges faced by DPW on leases were that buildings were leased at above market rates and the landlords were not maintaining their property. DPW had established an executive lease re-negotiating team that include National Treasury to stop the negative trend. However, since the team had just started its assignment there were presently no results. He outlined DPW action plan on lease agreements which included: finalising the supply chain management guides on the implementation of National Treasury approvals; obtaining a legal opinion on National Treasury approvals; appointing valuers to perform due diligence, receiving offers, performing due diligence, negotiating with landlords, and confirming funding before new lease agreements are signed. DPW had placed an advert to access properties available to ensure DPW has a five year needs assessment database.

Discussion
The Chairperson asked why DPW worked with a five year needs assessment database.

Mr Sithole replied that the database was for planning purposes however leasing would be the last option to be considered.

The Chairperson said that she supported the public private partnership model on lease agreements.

On current challenges, Mr Sithole said that during the open tender process for the Department of Planning, Monitoring & Evaluation (DPME) accommodation only one bidder met the criteria but the bidder was approached by another department so negotiations with the bidder could not continue; hence DPME is being evicted from its office. DPW had meetings with the Minister of Public Works on the Public Service Commission office accommodation last week although the landlord took DPW to court. Treasury has approved a deviation and the Public Service Commission accommodation challenge would be resolved by 30 June 2017.

The Chairperson asked for a reply on bureaucratic delays in making available buildings that were empty.

Mr Maroga replied that DPW had a number of facilities that it managed but there was a process used by DPW to identify the need for properties that could be used for schools. He promised to intervene on the bureaucratic delays to ensure that the TVET College in Nelson Mandela Bay had a building to use.

Ms Lesoma said that DPW should identify buildings to buy rather than buildings to lease.

The Chairperson asked DPW how it could avoid situations of leasing buildings from landlords that charged more than the market rate and did not maintain the building.

Mr Sithole replied that DPW had identified situations were properties were leased above market rates and it was tightening up on such lease agreements. In addition, DPW had issued letters to such landlords for re-negotiating the lease although the lease agreements were short term.

The Chairperson interjected and asked for the duration of short term lease agreements.

Mr Sithole replied that the lease agreements were signed for three years and there was a 10% increase in rent every year which did not favour DPW. He remarked that DPW had a challenge with high tenant turnover due to specific needs of clients however exit clauses were difficult to administer if the landlord had monopoly.

The Chairperson replied that maintenance challenges had a greater impact on the facilities managed by DPW so the Committee would focus on facility maintenance at its next meeting with DPW.

The Chairperson informed the Committee of its oversight visit to Bloemfontein and asked Members to prepare for it. He adjourned the meeting.