Early Childhood Development Grant Quarter 4 performance: hearing

Meeting report

Chairperson’s Opening Remarks

The Chairperson said that the Early Childhood Development (ECD) grant amounted to R1.3 billion, and was introduced in the 2016 budget. However, there had been a postponement and the funding of the grant took place only in 2017/2018. According to National Treasury (NT) and the national Department of Social Development (DSD), extensive preparatory work had been carried out to ensure the successful implementation of the grant funding within its first year of implementation.

He extended special welcome to the Minister of Social Development, Ms Susan Shabangu, and asked her to make an input before National Treasury gave its presentation.

Minister’s introductory comments

Minister Shabangu greeted everyone and apologised that she had other commitments and therefore was unable to stay throughout the entire meeting. She felt it important, however, to come to the Select Committee meeting as she was failing them in that portfolio, and wanted to improve relations with the Members.

She said she did not have much to offer the Ccommittee yet, as she was relatively new and was learning, but was ready for all of them to work together as a team in finding solutions for the country. Even though they might be representing different parties; the key was serving the people of South Africa.

The Chairperson commented that they aimed to work together as a Committee and that their approach was to work on intergovernmental relations. Early childhood development (ECD) was essential in the academic career of a learner -- it was very evident to see which learner was and which learner was not part of ECD, in the work that they submitted and which determined the marks they obtained. He emphasizes the importance of ECD and that when he goes to visit the 15 schools in his constituency, and insists on seeing progress in the foundation phase because that tells him what is going to happen when the learners go to high school. and whether they will succeed in their first year in college.

National Treasury Briefing

Ms Ogalalatseng Gaarekwe, Chief Director, National Treasury, said the structure of their presentation was that they started with ECD and went up to Grade R, as per the information they had received from their Parliamentary office. She outlined the importance of ECD, because children had rapid cognitive and emotional development during the period from birth up to the start of Grade R, and as such, ECD played a critical role in preparing a child to thrive in primary and secondary school. It assisted children not to repeat years and to spend only the required 12 years in school from Grade 1 to Grade 12.

She said that ECD contributed to the cognitive, emotional, physical, mental, communication, social and spiritual development of children. Besides having a positive impact on a child’s readiness to enter the schooling system, it could reduce the number of times a child repeated grades at advanced levels and minimise school dropout rates, as that was a problem they had been faced with, particularly the dropout rates. Over the long term, ECD programmes were likely to have many benefits, such as a productive workforce, reducing inequality across the richest and poorest quintiles, and positive societal impacts.

Given the inadequate provision of ECD, particularly amongst poor households, a National Integrated Plan had been adopted as a policy in South Africa in 2005 to ensure that each child had access to ECD, even if their parents or caregivers could not afford it. There had been other plans, but her focus was on the National Integrated Early Childhood Development Policy which had been approved by Cabinet in 2015, to ensure that each child had access to ECD.

Before the policy adoption in 2015, ECD had been implemented in provinces through the Department of Social Development (DSD), and then the Department of Basic Education (DBE) had taken over from there, indicating that ECD had been in South Africa for a while now and some targets had been met and others had not.

The DSD have a grant that was established in 2017/2018 to extend access to early childhood development to South Africa’s children. Although the grant was established last year, in previous years provinces had been receiving money from national government to implement this policy. The purpose of grant was to increase the number of poor children accessing subsidised ECD services through partial care facilities through a subsidy component. It was also to assist existing conditionally registered partial care facilities in providing an ECD programme to meet basic requirements in order to attain full registration through a maintenance component.

The grant had two components, the subsidy component and the maintenance component. The subsidy component had five aspects, but they would only focus on three. These included:

• Poor children that benefit from ECD services that were subsidised;
• The number of days subsidised; and
• The number of those attending ECD services in registered centres.

The maintenance component included:

• ECD centres conditionally registered as per the registration framework;
• ECD centres assessed for the maintenance component;
• ECD centres upgraded from the maintenance component;and
• ECD centres that moved from conditional registration to full registration as a result of the maintenance component.

On aggregate the grant had not spent 100% of the budget. The Eastern Cape had spent only 48.6%, and the Free State 68.8%. There were only three provinces that had spent 100% -- Mpumalanga, the Western Cape and Northern Cape, which spent 104.3% of their budgets -- while the rest spent less than 100% of their allocation.

Turning to the preliminary information in terms of the outputs as to what the money had bought, she said that only one province had not met the target of the number of children benefiting from the subsidy. The Eastern Cape had a target of 11 047 beneficiaries, and had managed to reach only 8 420 beneficiaries. The grant specified the beneficiary days as 264, and three provinces had not met that target. It was clear why the Eastern Cape had spent only 48.6% of their budget; as they only reported 209 days, with Limpopo at 215 days and North West at 248 days.

Ms Gaarekwe then turned to the statistics on ECD centres upgraded and maintained. According to the preliminary report, the Eastern Cape had made no actual upgrades and North West Province had been able to maintain only ten facilities.

The challenges faced in the maintenance component included service level agreements (SLAs) between the provincial DSD and ECD centres, which had been concluded late due to problems with the format. The format was being reviewed by the DSD to address the challenges. Some provinces subsidising ECD centres for less than the recommended 248 days had contended that they were doing so in order to extend services, but the actual number of children benefiting was much less than the target. There were late appointments due to delays in the recruitment process, with appointments being made as late as December 2017, and the appointment of staff to manage the grant had been slow in the provinces. This had made management of the grant, with the existing poor capacity in infrastructure units, difficult. There were delays in the supply chain management (SCM) processes for the appointment of contractors. Some contractors were appointed only in September, and the limit of R100 000 per centre was not sufficient in certain cases, due to the high quotations from contractors.

There was no grant for ECD in the education sector, and it was funded through the normal equitable share in education. ECD in Grade R was not funded from the ECD grant. The Government funding coversed the payment of stipends for ECD practitioners, the payment of ECD educators, the purchase of Learner Teacher Support Material (LTSM), the training of ECD staff, which includes the purchasing of training toolkits, and human resources development, which includes bursaries offered to employees who are interested in ECD. In addition, the ECD sub-programme on infrastructure provides for the construction of new or additional Grade R classrooms in schools. However, some provinces include their Grade R infrastructure under the primary school infrastructure, i.e. it was not a separate item.

Regarding the budget allocation of ECD in education, not all provinces had a budget for infrastructure within this programme, and others fell under the programme of public ordinary schools. Only in the Eastern Cape, Gauteng, KZN and a little bit in Northern Cape and North West, did a separate budget exist, but others would fall mostly under the building of new schools.

Looking at the spending, she said that this programme had never really spent its full budget. Only the Northern Cape had spent 100% of its budget and most of the other provinces had underspent in Basic Education. The building of Grade R classrooms would mostly fall under the category of new schools being built, but it was evident that schools were trying to build Grade R classrooms.

In conclusion, she said that the ECD grant was at an overall spending level of 79%, which meant it had performed relatively well for a new grant, and performance should improve going forward, given the appointments made. Outstanding SLAs, however, would have to be finalised. An increase in the limit to be spent for each ECD centre – from R100 000 from R180 000 -- would assist departments experiencing challenges on quotes.

She commented that allocations to ECD programmes and ECD infrastructure were quite varied across provinces, because some did it as part of the normal building of schools. Spending and performance on the ECD programmes seemed relatively good, partly due to a large part of the programme budget being allocated to compensation of employees (COE), and the completion of new of additional Grade R classrooms. There might not be a correlation with the spending on the ECD infrastructure programme, but this could be explained by provinces utilising the primary school infrastructure programme, for instance.

Department of Social Department: Briefing

Ms Connie Nxumalo, DDG: Welfare Services, DSD affirmed what had been stated by NT, that the grant was for subsidy and maintenance. She said that specific conditions existed and highlighted the key conditions. The subsidy grant would assist registered centres that were not fully funded from the equitable share, fully registered centres that were not funded or conditionally registered as partial care facilities, not funded and offering ECD programmes. The subsidy was targeted for qualifying children from birth to five years, or until they entered Grade R ,and the value of the subsidy paid was at a rate of R15 per child for a maximum period of 264 days.

The key conditions of the maintenance grant included: partial care facilities offering ECD programmes that were registered conditionally would be eligible for the maintenance grant; minor building and maintenance improvements aimed at ensuring ECD centres complied with the health and safety norms and standards, as identified by the DSD, would be funded from the grant; and the maximum value to be spent per ECD centre for maintenance improvements was R100 000. Prior approval for any amount exceeding the R100 000 should be obtained from the HOD and the CFO. An exceeding amount should not be more than 30% of the R100 000.

Other conditions included that provinces had to conduct assessments of conditionally registered centres and cost them in order to qualify for maintenance grant funding in 2018/19, and that all maintenance projects must be recorded on the National Treasury Infrastructure Reporting Model (IRM).

Ms Nxumalo outlined the ECD conditional grant medium term expenditure framework (MTEF) allocations, and commented that it would grow in the next financial year.

Regarding compliance with the responsibilities set out, the Department used the compliance framework that was approved by the necessary authorities. There have been compliance issues, but this was the first time their sector had managed a grant, and provinces had tried their best. The Department had tried to provide guidance and leadership in this regard, assisted by NT. All compliance issues had been completed on time, although certain challenges had arisen.

The allocations to the provinces were determined by the number of children who were in the age cohorts, as well as the poor wards and the Child Support Grant (CSG) means testing.

The small variation in the budget figures and the actual transfers and expenditure were due to the fact they were working with preliminary financial and performance reports that were still being audited. What was important was to confirm the performance of provinces as stated by NT -- that certain provinces had performed well and met their targets, whereas other provinces had failed to do so. Some provinces had been able to apply for roll-overs and some provinces had been unable to apply on time due to non-commitment to projects. The Eastern Cape was a challenging province, as there was no infrastructure, as stated by NT, but there had been 62% expenditure of the subsidy.

The focus for maintenance should be on health and safety, minor building improvements (including disability accessibility), early learning material and equipment. The overall performance on the maintenance grant had been 77%, but the Eastern Cape and North West had very low spending -- they were at 0% and 21% respectively. These were the provinces that the DSD had mainly focused on for guidance, so as to improve delivery.

The DSD was aware that Department of Public Works (DPW) had some challenges in respect of skills support for grants and infrastructure maintenance, and she described the methods of assessment and fixing the ECD facilities used by the provinces, which really assisted the provinces in terms of infrastructure maintenance.

She gave reasons for the underperformance of the North West and the Eastern Cape. The reasons in the North West included strike action which resulted in the province not being able to perform on the grant, particularly in the last quarter, which had compromised service delivery.

Reasons for underperformance in the Eastern Cape included delays in finalising the recruitment of the construction project manager and project managers, which impacted on the performance, as technical skills were required. The two project managers had been recruited in November and December 2017 respectively. However, supported by the DPW, they had done assessments, bills of quantities had been compiled from the assessments by the two project managers, briefing for phase one tender was advertised on 2 February 2018 and closed on 5 March, and phase two was advertised on 23 February and closed on 23 March. The Business Forum in Alfred Nzo District had raised issues during the two tender briefing sessions, and this had resulted in the cancellation of the tender.

To address the under-performance, North West would complete the application for the rollover of funds and continue with the fixing the ECD’s identified for 2017/18 when operations resume in the province, subject to the rollover request being approved. The Eastern Cape’s strategies included the conclusion of the recruitment of the construction project manager by end June 2018. There was a plan of action for the 95 ECD’s that had not benefited from the grant in 2017/18. An application for a rollover of funds from 2017/2018 had been made to the Provincial Treasury, but the outcome of the rollover of funds was still to be confirmed. In order to tackle the challenges, they had implemented corrective measures in the conditional grant, and their implementation of such would ensure that the provinces addressed their challenges and met their targets.

 

Ms Nxumalo said that at the last meeting, an issue about disability considerations hadbeen brought up, as the grant was not specific on how to deal with children with disabilities. The Children’s Rights Unit within the Department was conducting research on the cost of disability generally, because it was not just about children, but included other services and personnel from other services as well; such as determining how much it had to care in situations where special care was required, considering that there were different disabilities.

The next financial year’s planning had had improvements implemented, as a result of the gaps identified in previous years. The implementation of the grant for 2018/19 provided that: the 2018/19 conditional grant framework was developed and consulted with provinces; it was finalised and signed off by the Acting DG and submitted to National Treasury in February 2018; provinces had submitted their signed off business plans to the national Department; the plans were then signed off by the Acting DG and submitted to National Treasury on 12 April; a meeting with provinces to prepare for quarter 1 implementation had been held on 1 March; a schedule for the transfer of funds had been developed; funds had been transferred to five provinces; and funds would be transferred to the remaining provinces during May 2018.

The DDG concluded by recommending that the Committee take note of the presentation in respect of the performance of the grant in 2017/18, the reasons for under-performance and the strategies to be employed to address this, and the progress on the implementation of the grant in 2018/19.

Discussion

The Chairperson referred to the importance of the briefings, and said the lives of the 60 355 beneficiaries were being transformed. What was actually happening was a process of transformation -- transforming young children until they reached university and went out into the world. He reminded the Members of their role as agents of transformation, and emphasized the importance of the role of a teacher and the role of ECD practitioners. He asked the Members to always motivate the teachers and practitioners when they visited the ECD centres.

Ms T Motara (ANC, Gauteng,) wanted to know what informed the 264 days. She asked why National Treasury had said that the money (“the billions”) was ring-fenced, and which department it had been transferred to. She assume it was probably transferred to the provincial departments of Treasury, and in that case she wanted to know what measure of control had been put in place in the provinces for spending, to ensure it was spent on what it was meant for. She asked if provinces also ring-fenced the money.

Mr O Terblanche (DA, Western Cape) agreed that this was a very important issue, and that was why they should be tackling it that way. He said that R15 a day seemed to be a very small amount, and wanted to know how regularly it was being reviewed. They had heard that some of the buildings used as ECD centres were existing buildings, and quite often Government buildings were in a state of disrepair, so R100 000 seemed to be a very small amount – he did not know what one could do with R100 000 for repairs and maintenance. He was really worried about buildings they had visited, where they had seen that toilet facilities were not up to standard. It was a worry, because they were dealing with small children, and he was concerned about what was being done to ensure that they were going to be safe using the toilets. He wanted to know why his province, the Western Cape, had been allocated such a small amount.

The Chairperson commented that if the economy could be ignited to grow faster, the allocations would be increased through the division of revenue, and they had gone through that exercise in the fiscal framework and the Division of Revenue Bill, so they formed a package, and were not things that were standing loose.

Mr L Gaehler (UDM, Eastern Cape) asked if the Department was happy with explanation given by the Eastern Cape, which he said was a feeble explanation. If they were not happy with the explanation, then what was the DSD doing about it, because it affected the people of that province? He asked how many centres were they targeting in the Eastern Cape. He asked how long they thought the research on the disabled would take and when they could expect it to be completed, because there were a lot of children with disabilities, particularly in the rural areas. Were any centres envisaged to be established in the rural areas?

Mr L Nzimande (KZN, ANC) thanked the DSD for providing the presentation in Braille, so he had been able to get the full benefit of it. He added a warning to the NT, that he would not hesitate to take them to the Equality Court, because he had been telling them to do the same, and they were not providing their documents in Braille. On the issue of maintenance, he said that it seemed there was a lack of convergence between the Department and NT, in that the DSD said that everything was fine whereas the Treasury said that there was bad costing. He therefore wanted clarity as to whether were they standardising that area, so that everybody was up to scratch. Did they have control of the situation, or would arrangements be made to ensure there was an improvement in the maintenance component.

It was worrying that the African child would continue to suffer in structural conditions that were not conducive to his/her development. The research on how to finance the disability component was meant to focus on the child, but the Department seemed to be including “other services” in determining the costing. That was too broad, and it would not resolve what for him was the priority, which was that a child with disabilities who should not suffer like he did, as a result of lack of access to ECD and schooling. Therefore, the Department’s coupling of what would be their financing policies to their disability services, should be a matter of grave concern. Therefore, the question was what this research was, what stage they had or had not commissioned, and what time frames were they were looking at. The Department had a host of obligations, such as reporting to the UN Convention on Children with Disabilities as well as another one they would be signing up for in Africa, and other related ones. Therefore it was only fair they got clarity on the concrete terms and facts regarding the state of the research and also the details on what it was actually covering.

Mr M Monakedi (ANC, Free State) said that during their recent visit to the EC, they had come across very bad situations, where young children were in structures that were safety and health hazards. He wanted to know whose responsibility it was, between NT and the Department, to provide the necessary infrastructure in areas where there were absolutely no facilities existing. What interventions were in place to resolve this? He asked what plans were there to assist the Eastern Cape with its under-spending on ECD and other challenges from both theNT and the DSD, or were they just leaving it up to the province to resolve them? The presentation had not outlined what had caused the SCM delays. The causes could have included the late appointment of personnel for the project management team, but his main concern was that it seemed that such appointments were going to be finalised only sometime in June, meaning those problems were still going to arise as the end of the financial year moved closer.

Mr M Shabangu (EFF, Free State,) said that the Minister had set an example and that in the future, no presentation should be allowed without the presence of the Minister. He suggested that the R15 should be revised, commenting that it was an insult to give a disabled child R15 a day. The Eastern Cape and Northern Cape had not made any upgrades, and he would like to know the reason for that because in the Eastern Cape, children – including disabled children -- were still being taught under trees and they were falling into toilet pits and dying. He asked what remedies had been put in place to eliminate this bad practice, and asked whether teachers at ECD were given preference mainly because they were dealing with children who had disabilities. In the past, schools for the disabled and teachers working there were paid better salaries. He also encouraged people like Mr Nzimande to be roped in for such programmes of the Department, because they have experience with them.

Mr F Essack (DA, Mpumalanga,) said that he had heard nothing about benchmarking with international standards, and asked how they were benchmarking the ECD against other countries in sub-Saharan African, or maybe what was happening in places like Malaysia or Australia, for example. He asked what benchmarking standards there were, and how these numbers were correlated and the figures worked out. Were the figures were purely budget-based, or thumb-sucked? He asked what was basically transpiring in sub-Sahara Africa for them to have some form of benchmarking standard. Why were some provinces reporting 248 days against other provinces reporting 261 days? He said, the constraint on funds was going to have a huge impact on the DSD’s ability to successfully roll out their plans. The Department had had a grant for R100 000 for infrastructure development, and then eight to12 months later there was some R80 000 increase, and they were now benchmarking at R180 000 for infrastructure. This was a problem, as the Department had to marry their numbers and their figures, and he asked how the numbers would be consolidated.

Mr T Motlashuping (ANC, North West) said the issue was close to everyone’s heart because this was the foundation of the beginning a life that would end up taking us somewhere as a country, and if it was not well built and moulded as a country, then it would go astray. With that being said, his observation from the presentation of the NT was that the North West and the Eastern Cape had the largest number of children attending ECD institutions, yet they were underperforming. By the third quarter, North West’s expenditure percentage had been at 40.5%, and was supposed to be at 75%. Therefore, the reason of the strike sounded very feeble to him because there had been an under-performance consistently throughout the quarters.

He asked NT to explain why the eight provinces had R2.1 million set aside, and the North West Province was an exception, at R1.96 million. The rate of economic growth had been cited as a reason for provinces not performing, but the economic growth of the North West was more than any other province. He was therefore worried when the ECD was under-performing. Something had to be done about the funding and infrastructure in the ECD institutions, and this did not speak well for the platinum province. He also affirmed what had been said by Mr Shabangu, that in the absence of the accounting authority, it became difficult for them as the public representatives to speak to officials while their principals were not present. If a province did not bring its Member of the Executive Committee (MEC) while faced with these challenges, he was not sure if the Committee would allow the provinces to present to them in the absence of their political heads. He wanted to persuade the Committee that all those who did not bring their MECs should not be allowed to present.

The Chairperson commented that the Northern Cape MEC was present, and that was due to the good communication that he had with the representative in the Northern Cape with the National Council of Provinces (NCOP). He also spoke about good communication with MPs present and the Chief Whips on the other side and the chair of chairs and said he would leave it at that. He further stated that the North West MEC was here and that the Eastern Cape’s MEC was not present, but had sent a delegation.

NT’s response

Ms Gaarekwe stated that she would respond to only a few questions, as most of them were from a policy perspective and the Department had to answer them. She would begin with the question of about what measures had been put in place to ensure that funds went where they were supposed to go. She indicated that the Grant was a Schedule 5 Grant in terms of the Division of Revenue, which meant that it was for a specific purpose, so provinces were not supposed to use it for anything else. From her experience, when provincial Treasuries received money for a particular grant, they gave it to the department that was supposed to receive it, and not to anybody else. The expectation was that the grant would be used for that particular purpose by the department that received it.

Whether there was convergence regarding what the challenges were, NT had the same view as the DSD in that there were some challenges in the maintenance component as a result of departments getting quotes for more than R100 000, and because of the that there needed to be an increase as R100 000 was too little, hence the R80 000 increase.

Regarding how the NT assisted a department, they were unable to go directly to a department -- they had to go through channels. Their counterparts were the provincial Treasuries and the national Department of Social Development, so they used those channels to assist the departments.

She did not understand the question from Mr Motlashuping, and asked if he could raise it again later.

DSD’s response

Ms Nxumalo said she would start by answering what informed the 264 days. It was basically all the days in the year, excluding weekends, because they believed that ECD should not have a closing, as a child needed to attend continuously. She clarified that no province may claim for more than the 264 days.

The R15 per day per attendance of the child was not inflation related. She admitted that it was very low, but they had been coming from as low as R7 as a sector, and had navigated to higher amounts. They were now at R15 and had decided to equalise, because some provinces had been at R15 for quite some time and one, KZN had been at R17 or R18. They had therefore decided to equalise this grant so that children in all provinces had the same benefits. They were continuously engaging with NT to see how they could best increase this amount, either at the rate of inflation, or at least more towards R21, which was not ideal but was better. However, due to the financial constraints they were at R15.

The R15 was divided into three parts: nutrition, staff and learner support. She referred Members to the presentation by NT where they had stated, under Basic Education, that some of the money had to go to stipends. It was unfortunate that for the 0-4 cohorts, they had to get stipends from the payments of the children that were attending ECD, and hence they had said that they should take some percentage from the R15 to augment the payment.

The reason why the Western Cape had been allocated a small amount was because a survey from Statistics SA had been used to indicate how many children in the province were within the age cohort of 0-4, and within that age cohort, how many were within the identified poverty wards and also within the means test of the Child Support Grant, so that they were able to establish their target.

She said that the national DSD was worried about the Eastern Cape, and as a measured step to assist them they had given them only R5 million instead of R12 million this year. This was for them to sort out their challenges and processes, and then they could be allocated the R12million, because if they allocated the R12million in this situation, the money would sit and would not be spent. Treasury had also confirmed that if they continued to under-perform, the grant could be withdrawn completely, but the focus was on the children and not on the provinces.

When they were developing the ECD policy, some benchmarking exercises had been done. They may not have been enough and they may continuously want to check and explore as to what other countries were doing. This was to ensure that, as they wanted to implement a good concept of universal access, they would know how best to achieve that. They had benchmarked with Chile and had to benchmark with other countries that were similar to ours. The visit had been facilitated by the Presidency and the Department of Performance Monitoring and Evaluation (DPME) so that they could begin to understand the approach of other countries on ECD.

Mr Mzolisi Toni, DDG: Children’s Rights and Persons with Disabilities, DSD, said that he agreed with Mr Nzimande that the disability issue was an area that needed serious consideration. At the last meeting they had promised that they would focus on the first part of the research, which had been done. However, this research did not specifically focus on people with physical disabilities and also children with disabilities, so this second phase would focus on those two areas.

He admitted that this was an area where the body of language with regard to service providers was very limited, and therefore people begin to manipulate the process. The Department had tried in 2017 to procure a service provider. Unfortunately, when a service provider had been identified, because the money put aside for this was about R900 000, and what they found was that the service provider had doubled the amount to R1.8 million, and they could not afford this budget. They had been given an opportunity to negotiate with the service provider, but had failed because the service provider had stated that they would want to increase even the R1.8 million because of the specification they had been given.

They were thus back at square one, and had tried to find a way to work with the United Nations Development Programme (UNDP) to at least get some support from them. However, for this financial year, they had decided to determine the cost drivers and in that way there would be some work done that focused mostly on children so that progress could be made, because the urgency of the matter had been made clear by the Members of the Committee.

Ms Dikeledi Mothobi, Head of Department (HOD): DSD, North West, said she wanted to add to what had already been said about equalising the number of days subsidised. They had struggled with that aspect because they did not want to cause dissatisfaction in the ECD sector, and therefore they had deviated. They had equalised to what they had been paying with the equitable share allocation. They were going to correct that in this financial year, so that all ECDs, whether they were subsidised through the conditional grant or equitable share, were subsidised for 264 days.

Regarding the maintenance component of the ECDs, she conceded that the strike had happened in the last quarter of the financial year, and that before that they struggled because they wanted to prioritise ECDs that were in the villages, and had wanted to prioritise water and sanitation. They had found out, however, that most of the targeted ECDs needed boreholes and the construction of toilets from scratch, and the allocated amount was far too little. They therefore had to start over with a new list in the second quarter, and that had cost them a lot of delay and under-spending.

The second challenge was that their SCM processes were not up to scratch and therefore did not get a good response from the service providers. They had revised their processes for this financial year, to get better results.

The Chairperson reminded the Members about the purchasing power parity (PPP) programme and how they should utilise it. He reminded the deployees of their duty to implement service delivery and how they should be on the lookout for it everywhere they went.

Eastern Cape DSD: Briefing

Ms Ntombi Baart, HOD, DSD, Eastern Cape, admitted that the poor state of affairs in the province was not acceptable. Their approach to the conditional grant had been informed by the fact that during years 2015/16 and 2016/17, the Department had used its own equitable share to allocate a budget for infrastructure. During those two years, they had experienced difficult challenges in following through because of a lack technical expertise. She would not go into detail about the background, as those were factors that had already been dealt with in the meeting. She wanted to touch on the issue of the grant, whereby the requirement was that they had to provide technical capacity and maintain 180 ECDs, which also included goods and services.

The key elements of the grant had already been covered, but she wanted to focus on the administrative side, where they were required to recruit technical support. At the time they were allocated the grant, the Department did not have technical expertise and were relying on the Department of Public Works to provide it.

One of their shortfalls had been that the initial assessment was done by the DSD in terms of determining the norms and standards. The social worker would go to an ECD centre and look at the norms and standards, and determine the figures as R60 000 or R120 000 at face value. When the DPW did a technical assessment, however, it would state that it came to far more than what had been earlier indicated by the social workers, so a review was undertaken.

The appointment of the technical support staff was prolonged by their own processes in the province, because when they received the conditional grant guidelines and they were appointing, their Provincial Treasury did not allow them to go beyond a three-month contract, because they said that that was the determination of the Department of Public Service and Administration (DPSA). They had tried to solicit support and an explanation from the national DSD, including the chief financial officer (CFO), and were at pains to try and explain that it was a conditional grant and there would be a guaranteed allocation for the post in the future. Eventually, it was approved for a longer period than three months. Their Personnel Administration System (Persal) was being centralised by the Provincial Treasury, and they were unable to make any appointments without first going through them.

What they had done from their own budget was to prioritise the appointment of the director of infrastructure services, because they did not have that capacity in-house. They also had their own challenges with operational efficiency in the Department. Due to most of the senior posts in the Department being filled in an acting capacity, she was pleased to report that they had appointed their own director of SCM in March this year. This had now provided clear guidance on the handling of the tenders with which they had been having problems.

Now that they had their own project managers, they had struck a deal with the DPW that they would allow technical support per district, which had not been the case in the past. For the eight districts in the province, the DPW was to allocate one technical support person, who would be assisting the two project managers. With the appointment of the new director for SCM, the whole review of the tender process that had been done for the 2017/18 year had almost been finished. The Bid Evaluation Committee did sit on Friday, to ensure that there was finalisation of the projects where they had applied for a rollover.

The Eastern Cape had their own challenges in terms of the ECD forum. The CFO and the SCM director had as a result done rounds throughout the province, and had also prioritised the Business Forum of Alfred Nzo to try and deal with the challenges, where competitive bidding in those particular areas had not been allowed.

The majority of the children that required funding from the DSD resided in the OR Tambo region and in this area, most of the ECD centres identified for restructuring or refurbishing were mud structures, and it was not possible to do the restructuring with the amount that was allocated, nor to demolish, as the requirements were for structures to be renovated.

Another major factor was the issue of ownership, because most ECDs were privately owned, and even municipalities had to assist by allowing the municipal buildings used for ECDs to be surrendered to those ECD centres so as to have proper ownership of the centres. They had acquired some and there had been interaction with traditional leaders about availing certain buildings that could be utilised by ECD centres for communal use, and could be renovated as per the requirements.

Ms Baart said that the issue of the number of days subsidised had been spoken about, and when it was looked at in terms of equalisation, one found that there were going to be some disparities, and they had challenges with the ECD centres. On April 10, she had had a meeting with all the sector organisations of ECDs on the issue of the subsidy, and they had increased the number to 237. This showed that they were moving towards their target of 264. She admitted that it was unacceptable, but they had challenges such as budget limitations. She understood that they had a budget that they had sent back, and said that they had other challenges of disparities in other sectors in terms of funding.

The DSD had sat with the Department of Education because they were looking at the funding approach for all the ECDs in the province last year by both departments, including being assisted by the Department of Health, and they had made a costing which had been set at a significant amount.

They had now overcome some of the recruitment challenges in respect of technical support and at the end of this quarter they would be confirming the appointment of the construction project manager, as well as the director of infrastructure who would augment the work that was currently being done.

The DSD had been reluctant to just transfer funds to the ECDs without technical support to monitor what had happened, and that approach was informed by previous experience when they were equalising their own equitable share. That had since been reviewed and that approach would be followed, but they would ensure that there was monitoring because the aim was to ensure that the ECD centres received full registration, which they were currently unable to do.

The Chairperson commented that the Committee would like to see the action plan that addressed the province’s challenges, because the action plan and budget funding must speak to each other in regard to ECDs. A quarterly engagement with the portfolio committees on finance and social development in the province was crucial to monitor what was happening at the grass roots level, all the while receiving reports from NT telling them how they were spending.

North West Province: Briefing

Ms Dikeledi Mothobi, HOD, DSD, North West, said she would start by focusing on what they had done as a Department in each quarter. In the first quarter, 48 ECD centres had been assessed for infrastructure maintenance in deep rural villages and townships. Priority had been given to the provision of water and sanitation, but the unit cost in the quotations received had far exceeded the    R100 000 threshold per centre. The list had been abandoned as the projects were not affordable.

In the second quarter, a new list of 45 ECDs which required minor maintenance had been assessed and confirmed. SCM processes were completed in respect of 11 centres. and maintenance work had commenced.

In the third quarter, nine ECD centres were completed. SCM processes (briefing sessions) had not been properly coordinated, which had led to non-compliant quotations. The process had had to be redone and there had been loss of time. The challenges that they faced were due to the fact that they were doing it themselves, inviting and briefing service providers and asking for quotations, but their response had been poor.

The fourth quarter saw strike action. However, two ECD centres were completed and service providers were paid. SCM processes had been completed in respect of 11 additional centres. Three of them had been completed and pre-payment inspections would be finalised on Friday 18 May Service providers for the remaining eight centres were in receipt of purchase orders. An application had been submitted for a rollover in respect of 11 projects. They would hear from the national Department as to whether the application had been approved or not.

On the subsidy grant, their allocation had been R26 258 900, and their expenditure as at 31 March had been R18 047 920 (68.7%). They had under-spent by R8 210 980; and an application had been made for a roll-over in order to pay the March subsidy claims amounting to R8,2m, as payments were made retrospectively. They had experienced problems with the quarterly transfers to ECDs because it posed a challenge of advance payment -- having to chase ECDs when they already had money in their bank accounts.

She said that they did not really have problems with the subsidy grant, but that in the fourth quarter they had been negatively impacted by the strike.

Under administration they were able to appoint one project manager for Infrastructure management and one social worker for programme subsidy management, and one administrative support.

She concluded that various lessons had been learned. They had devised improvement plans and aimed to implement them, in terms of both the subsidy grant and administration.

Mr Hoffman Galeng, MEC: DSD, North West indicated that he took full responsibility and was not trying to shift the blame on anybody. He highly appreciated the intervention from the national government in their Department.

He wanted to emphasize the amount allocated to renovate the ECDs, which had been discussed. He found it difficult to understand how they could be compared with all other provinces such as Gauteng, Western Cape, KwaZulu-Natal, and particularly the Free State. Gauteng and the Western Cape could not be compared with North West and Eastern Cape. The money allocated should not be equal. The Eastern Cape had shown that many of the “buildings” were mud structures, and he asked how one could renovate a mud structure. He appealed that when the money was being allocated, that the provinces be judged according to the prevailing conditions.

His second point referred to the R15 a day. He acknowledged that the Treasury was working to increase it to R21, but that was still an insult because the reality was that more than 90% of the rural areas that the children were coming from depended on these grants. He suggested it should be at least R30 to R35 a day. If the government was unable to do this, then the NGOs should assist it, and not the other way around, as was the case now.

The Chairperson commented that it was very important, having listened to the two provinces, that they should have an engagement with the Financial and Fiscal Commission (FFC), because it made recommendations to the Minister of Finance and Treasury. Secondly, the Division of Revenue was agreed upon by all nine provincial MECs for Finance, so they should be mindful of the consultation process because the MEC for Finance needed to go back to report on the economic state In the Provincial Legislature. This was to ensure that everyone was on the same page.

Lastly, he suggested that the DSD must engage with the private sector to become a part of the action plan in their provinces.

Northern Cape: Briefing

Mr Gift van Staden, MEC: DSD, Northern Cape, echoed the sentiments of the North West MEC and said that they did not often get the opportunity to share information.

He said the Northern Cape, like North West and the Eastern Cape, was rural in character. It was the most sparsely populated province in South Africa -- they had 2% of the population scattered across 30% of the geographical area of the country. The vastness of the Northern Cape made service delivery quite challenging. It made the costs much more expensive, because the most rural villages were far from the bigger centres, so costs were higher than in the more urban areas. The transport of material and services and service providers was a major cost driver in the improvement of infrastructure. They just wanted to indicate that while they were happy with what they received to implement, they also wanted to indicate that it came with a lot of challenges, as those in the rural areas expected services equal to those in urban areas.

He assured the committee that ECD was also a passion of the DSD in the Northern Cape, and that they would invest in the young children and do their level best to ensure that there was a better outcome in the future.

Ms Melanie Kivedo, Chief Director, DSD, Northern Cape said that they had 125 512 children aged 0-4 in the province, of which they subsidising only 17 079 and were funding 359 ECD centres. Most of them were in the very rural districts of John Taolo Gaetsewe and Kuruman. From their equitable share, they had spent R67 671 120 during the past financial year.

The ECDs selected had already been conditionally registered as silver or bronze, meaning they were 40% to 79% compliant. The grace periods of 3-5 years for upgrading of structures were due to expire. Assistance was needed to improve the registration status to gold. As the MEC had mentioned, most of these ECD centres were the only ones in the community and they could not afford to close them down due to non-compliance. In most cases, the selected ECDs were the ones that had a serious impact on the wellbeing and the protection of their children, as well as safety. They had also selected centres that were not benefiting from any donor funding, like the mines, solar companies or the National Lottery Commission.

The infrastructural areas that they prioritised included crumbling walls, unsafe roofing and electrical wiring, and the general safety standards of the buildings. More specifically, there was a focus on the upgrading of the pit toilets to the French drain system in areas where toilets could not be connected to the municipal sewerage system. They had also prioritised the connecting of water supplies to ECDs and the fencing of sites to ensure the safety of the children.

R8 million had been received for maintenance, and they had spent R6 million of that on the conditional grant, but the province had been topped up with R3 million, and that was where the 104% presented by NT had come from.

A total of 65 sites had been identified, but only 59 had been completed, and 2 974 children had benefited. The reason for the deviation had been because the poor state of the infrastructure had resulted in the costs of maintenance and repairs to exceed the grant, which was between R100 000 and R130 000 per centre. The vast distances were also a challenge, and a lot of money was spent on transport. The top-up funding was spent to complete the repairs, and some payments had been made from the equitable share instead of from the conditional grant allocation. This had been an internal administrative challenge and as an improvement plan, they would ensure that they give clear instructions to their district finance units regarding the separation of the money paid through the conditional grant and the money paid through the top-up funding from equitable share.

In terms of the subsidy, they had spent the R3 million that they had been allocated and had benefited 1 221 children. They would continue to consolidate this best practice in the new financial year.

They had spent less on administration than what was allocated. The reasons for this included the fact that there were limited qualified professionals to fill posts, and this had delayed appointments. Going forward, they would appoint a quantity surveyor for the two remaining districts.

She summarised their achievements as having about R2 million unspent and had requested a roll over, which had not been approved.

The Chairperson commented that in a country of scarce water resources, it was important that the ECD centres had gutters and tanks to harvest rain water.

Discussion

Ms Motara said that she would congratulate the Northern Cape, because the expenditure performance on the ECDs was actually impressive in relation to the challenges that they had, which were not different from their other counterparts. There had generally been a high level of compliance with the conditions of the conditional grant. She commended their performance and said that if they continued in this vein, they were making a strong case for additional funding in the future, as they had surrendered only R1.5 million.

She told the Eastern Cape and the North West that their identification of structures that needed renovations was wrong. They could not say that a mud structure needed renovation -- they could not renovate a mud structure. That was something that the Committee already knew. It needed a different funding source and a different management plan. She was worried that they might be cross-duplicating targets in the province as a whole, because there would probably be infrastructure that would be built through the ECD grant of the Department of Education, and that was supposed to address mud schools or mud infrastructures.

To identify mud structures as a target for maintenance from the ECD grant was not possible. The grant for mud structures had been allocated through the Department of Education. Therefore the provinces’ presentations had raised had a lot more questions than answers -- there were too many holes in their reports. The provinces were going to under-perform because their targets were just incorrect, and she wondered what type of picture the Education Department would paint of the two provinces, especially the Eastern Cape, because they had a grant that was supposed to fading out at some point.

She commented on the North West’s bronze, silver and gold categories for ECDs, and said there should be some criteria put in place that determined how to identify the infrastructure that should be maintained. This also applied to the Eastern Cape. She did not accept the excuse that they had identified a structure, but because it was a mud structure they had been unable to repair it. They could not be putting it in their plan to have ECD grant money spent on it.

She reflected on a situation that they had a year ago with the Buffalo City Municipality, when they were adjusting the budgets. The Municipality had requested rollovers which had been denied, precisely because of the way they had planned. The way the Eastern Cape planned just made under-spending, under-performing and under-reporting possible, and did not make performance possible. For instance, they had spent six months trying to recruit staff and when they realised after six months that they could not get the staff, they had gone to Public Works to do in two months what they could not do in six months. It had then taken them an additional two months to conclude, but by then the financial year was over. Therefore, in terms of spending money, they had done no work in the whole financial year. If the DSD did not have in-house expertise, Public Works had a department in all the provinces, and they were supposed to have the expertise. She was trying to understand how the Eastern Cape functioned, and how they got to even approve list of ECDs to begin with. She commented that the quality of work that the Eastern Cape had produced, not just from a desktop survey but from having seen it through their visits, was just shocking.

She said that the Provincial departments must not rely only on their own conditional grants or funding from Provinces that came directly to the departments for them to be able to do their work. Municipalities also got grants for bulk infrastructure.

The North West had removed many centres that they could not maintain because they needed water and sanitation. This was not the responsibility of the DSD, it was the responsibility of the municipalities, and if the municipalities fell under a district, the district received grants for bulk infrastructure, which was water and sanitation. It was unacceptable that a department of social development could come to a committee and say that they could not what it had planned to do because it needed water and sanitation. It meant they were planning incorrectly, their inter-governmental committee (IGC) system did not exist, or it was lacking somewhere.

She commented that they could not identify centres that were unable to be maintained in the first place, With their three-year budgets with the municipalities, with their Integrated Development Plan (IDP) and their SDP, they must go and plan correctly; so that they money that they spent, together with the money that came from other departments, grants that came from NT to the municipalities through local districts, gets spent adequately and correctly and the correct department reports correctly for what they were supposed to be doing.

The excuses for under-spending tabled by the provinces were unacceptable, as mud structures and water and sanitation were not their responsibilities. This was why they would always request roll overs for unspent funds, and the issue of unspent funds was simply because they did not have the correct plan for spending. This had to be corrected, because it was not about the money that gets taken away from provinces, but rather about people’s lives on the ground, who were affected.

The Chairperson commented that Ms Motara had hit the nail on the head. He then referred to the national DSD and said that their monitoring and evaluation of provincial Departments was not only about the report sent from the provinces to them, but also the action plan to assist the provinces when they see that things were not running smoothly. This was crucial because the money allocated must be spent wisely.

Mr Gaehler said that he agreed with Ms Motara, but that it was deeper than that. In fact, it was a pity that the political heads were not present, because they were the ones that they should be talking to. He always felt sorry for the poor officials, because they had to carry out the political direction at these provinces.

He agreed with the MEC that the “one-size fits all” approach did not work. One could not expect the Eastern Cape to be like Gauteng, for instance, and he also blamed NT and the DSD for this, as they should have had their own team of quantity surveyors so that they knew what the cost implications were.

Although he agreed with Ms Motara, this was about intergovernmental relations, because the bottom line was that there were mostly mud structures in those areas. Blame should also be apportioned to the Education Department. It was a vicious circle -- there was no water, there were no roads, there was no electricity, and that was the truth of the matter, whether one liked it or not. There must be a time when they could speak to the political heads, because that was where the problem was.

The Department could not take a year looking for a technical person -- it was just impossible. For Instance, the DPW nationally had an entity that dealt with quantity surveyors, and it was a government entity that was there to assist the provinces. He also mentioned an entity called the Contractor Incubator Programme (CIP) which dealt with the artisans, and those were government entities that they were supposed to be using if they had a problem.

The Eastern Cape was a political disaster in every department, and the political heads were the problem.

The Chairperson commented they would return to meet again in the first week of August, and that the MEC of the Eastern Cape should be notified well in advance to attend.

Mr Shabangureferred to the Northern Cape, and said the recommendation of four officials for twelve months was a very good example, and thaqt they should keep it up as that was job creation.

He commented that the Eastern Cape HOD was working under very difficult circumstances, according to what the Committee had heard. Money was being channelled somewhere where it was very difficult to access. According to the presentation, only one person was in charge of all these departments.

Allowing the same contractor to benefit many times was wrong and unacceptable, as were tender malpractices.

According to the records, only one ECD centre had been maintained. That was a very poor performance and he suggested that in the near future, the schools must also help with the submission of reports, because they might be getting wrong reports. The upgrading of ECDs was a cause for concern due to the under-spending. He proposed that the boreholes be installed, especially in rural areas, to supply water to the needy children.

The Free State was also a very rural area, like the Northern Cape, but they were under-funded because they had the most rural and the poorest of the poor children, and something needed to be done regarding this.

Mr Terblanche said that it was quite clear that the officials present were not procurement experts, because in terms of government policy, projects of up to R200 000 could be procured on a quotation basis. With their budgets of R100 000, they procure dfor their projects and would need expertise if their budgets were higher. He was bothered that all the provinces had said they had appointed a director, who was earning almost R1million a year, to do a few little things, and had appointed additional personnel that he felt were unnecessary. He recommended that the officials go back and ensure that they understood procurement in government. He suggested that they could enter into term contracts and needed to understand government policies. He was appalled at what he had heard, because people did not know what they were supposed to be doing. They should go back and study what needed to be done in government, to plan and implement, and then they would be successful.

Mr Monakedi referred to a comment the Chairperson had made after the Eastern Cape presentation, that they could not come and lament about their challenges and not state how they planned to address them. He asked the North West province and the Northern Cape to ensure that next time there would be some progress.

The Northern Cape had decided to top up the grant they had received for ECD, but an unintended consequence had been the under-spending of their Conditional Grant. They needed to make sure that although the top-up was welcomed, the grant was also spent 100%.

He supported the advice given by Mr Terblanche about procurement processes, and hoped that the officials took the advice and used it. He encouraged them to “think out of the box” when coming up with solutions to their challenges, as long as they were legal.

He asked the North West about the strike and its impact, whether or not the strike was over, and which departments had specifically been affected by it.

Mr Motlashuping said that when he read the Eastern Cape report, he was not sure if the Committee had internalised what had unfolded, particularly the recruitment process. He referred to how they had advertised for the post of a quantity surveyor. He understood that when one advertised, this was done according to the need and according to the organogram. Even if it was not a core function, one did not just use public funds arbitrarily. The report stated that they got an approval on 20 April, and people had assumed duty in November -- it had taken almost seven months for them to assume duty. He expressed his dismay at the fact that it took them that long to recruit quantity surveyors or project managers.

He referred the Committee to the report where it stated that the Province had immediately presented this reconfigured post to the Provincial Coordination Management Team (PCMT) on 7 November 2017, and it was received from PCMT on 20 November. The post was advertised for a contract period of 12 months. He did not understand how a post could be advertised for a period of 12 months, and said that the dates were very confusing.

The Chairperson commented that it was very clear to the Committee that there had to be a stronger hands-on approach, and also that provinces had to learn from each other’s best practices.

Eastern Cape response

Ms Baart said the advertisement of the post involved the issue of the contract period that they were allowed by the PCMT, as they could not advertise any post in a department without going through that structure. It was a coordinated structure through the office of the Premier, and even when one got an annual recruitment plan approved, one still had to subject that to the PCMT. Even if it was an attrition post, exiting through death or retirement, one still had to submit that post to the PCMT. She explained that that was the process, and even the advertisement was done centrally by the Office of the Premier (OTP). They had to submit their requests for advertising; which was dependent on their schedule and workload.  Once that process was complete, one still had to go to Provincial Treasury to open up a Persal code for a new appointment, and one could not do anything without Provincial Treasury having approved. Therefore when they had re-advertised the post, from a quantity surveyor to a project manager, and that process was done, Treasury had initially queried the three months without a DPSA ministerial directive, and they had re-advertised. After that, they had queried the 12-month contract, stating that they could not make the contracts beyond twelve months, even though it was indicated that the grant was conditional and thus guaranteed an allocation. The period was therefore just a period of the contract appointment.

She said that they had taken note of the questions posed to them, and when they returned to the Committee on 1 August, they would deliver a more comprehensive presentation.

During 2015/16 and 2016/17, the Department had utilised its own equitable share, and to improve the infrastructural side of the ECD centres, they had gone to the DPW to request technical expertise and there had been a definite “No” as an answer. When they had been allocated the conditional grant, there had been some level of sympathy from Public Works, and they had agreed to assist them. She could provide proof to the Committee of her own submission to the PCMT on the challenges they were having in terms of infrastructural capacity, requesting the DPW to take over because they were a social development department.

One of the things that she had indicated in the report was the approach that they had identified in doing the procurement themselves, which would require improvement in making allocations, and following up on them through the technical support that they had augmented. At the time, there had been no capacity provided by Public Works, and they had taken time to come on board and assist them.

The identification of the list of the ECDs that needed to benefit was informed by the norms and standards, so one would find that the majority of the initially identified structures would be the mud structures. The question would be which of those centres did not fully meet the norms and standards so that they could be fully registered as ECDs. They wanted to ensure that they moved them from a state of being partially registered, to being fully registered. She admitted that they needed to improve their relationship with the Education Department, which began at Grade R, and they did all the Grade R infrastructure and learning approach.

The MEC had made a presentation at the Ministers and Members of Executive Council (MINMEC), which was led by Cooperative Governance and Traditional Affairs (COGTA) on the ECD policy, as well the ECD infrastructure grant. The issue there had been that the municipalities did not want to use the allocation of the Municipal Infrastructure Grant (MIG) because it was their responsibility -- a constitutional mandate -- and they did not want to take that responsibility and hand it over to the departments.

She gave an example of a situation in Mdantsane, where an ECD centre was burnt. The centre was not owned by the DSD -- it was privately owned -- but if one went to the Municipality, they would not be able to assist. Those were practical challenges that the Department was facing on the ground.

The issue of SCM may look easy, but it became a technicality when it came to the amounts involved. She was happy that the director they had appointed came from the DPW, and that some of the problems with Public Works would soon be a thing of the past.

North West Province response

Ms Mothobi said that they appreciated all the input and advice from the Committee. They were reviewing their procurement processes, and also considering the need for transformation, which required providing support for rural economies.

On the issue of unnecessary extra personnel, the presentation had indicated that they were considering direct transfers to the organizations, not in 2018/19 but in 2019/20. If they finally decided to take that option, they had to have the capacity to monitor and to give strict conditions to the organizations so that they did not transfer funds only to find that they were not being used for the intended purposes.

They would definitely strengthen their interactions with local municipalities, but as the other provinces had said, the municipalties prioritised other issues and they found that their ECDs operated in areas that were not serviced.

She thought the recommendation for looking at rain water harvesting was very useful and more affordable than trying to have boreholes, and they would look into that.

She concluded that North West’s intentions were to comply with the conditions of the grant.

The Chairperson commented that the conditions had been set out in the schedules, and that was the prescription for how the funding must be utilised.

Northern Cape’s response

Mr Van Staden said the recommendations were really helpful. The assumption that their intergovernmental operations were functional was inaccurate. In his previous employment he had been in local government, so he knew what he was saying. It was still a work in progress and it was not maturing at the desired pace. One could not have one department relying on the expertise of another, as one ran the risk of not completing that project. There was a high chance that one would not access the expertise from those departments, and that was the reality. There was resistance, unwillingness and everyone was fighting to deliver what they had to deliver at their level. Thus, on the ground, the issue of intergovernmental operations as envisaged by the legislation was still a work in progress. It was not where it should be.

Ms E Norem, CFO, Department of Social Development, said that the procurement guidelines were very clear, but procurement on the ground was something different. This was why one needed experts to give one the specifications, because with incorrect specifications one could not deliver quality work. This was why the Department had come up with the strategy of bringing in experts to help them identify the specifications and measure up what needed to be done. Essentially, the expertise had been sought so that they could measure whether they got value for their money from the service provider used, and make sure they delivered something lasting and of good quality.

In the rural areas, procurement was very difficult compared to the urban areas. The reality was that one may not be able to find one service provider to do the job, and would have to bring in others. However, community members may be angered by the fact that “outsiders” were being brought in. Therefore one needed to consider getting value for one’s money, complying with the procurement processes, and also ensuring that one empowered locally. These were the challenges on the ground. It was not only about compliance anymore, but also about empowering the right people in the right places.

The Chairperson commented that success was a continuous investment in excellence.

National Treasury’s response

Ms Gaarekwe referred to the point made by the Eastern Cape, that the school backlog grant was only for the Education Department, so it would not assist the DSD. Therefore, in their case, she suggested that they re-prioritise from their equitable share, like the Northern Cape was doing, or request money from the Provincial Treasury for infrastructure, because mud structures were an issue in the provinces.

The other issue concerned rollovers, and she commented they would receive the rollovers they had applied for, but the Eastern Cape would lose most of the money because they had not applied for it. Therefore they would lose R22 million, and were only going to access the R6.3 million.

The North West had received R8.2 million, and they would call the provincial treasuries next week to do the assessments and let them know of their approval early.

The Chairperson suggested that after the meeting was adjourned, North West and the Eastern Cape should speak to Treasury for them to sort it out right now, on the spot

Ms Nxumalo said she would be happy if the three provinces did meet Treasury because they would not be able address the backlogs if the rollovers were not approved and processed. The issue of infrastructure was a broad challenge in the social development sector. Even though the ECD had existing structures, it was still a challenge.

Everyone was in agreement that the R100 000 limit was too low. NT had agreed to increase it to R180 000, but that was still very low, but was something that could be progressively improved because it was basically for maintenance and repairs, and not for building new infrastructure.

She wanted to touch on issues brought up by the HOD of the Eastern Cape. Schedule four of the Constitution provided that child care fell under the municipality, but the challenges were that the municipalities were not taking on this responsibility, and even in the MIG, the issue of ECDs was not catered for, hence the many challenges of service delivery facing social development.

The other issue was that the Departments of Health and Education had infrastructure grants, but Social Development did not. Their infrastructure was not moving or improving for either their facilities or ECDs. She thought that NT needed to consider allocating a broad infrastructure grant, because telling themselves that municipalities would come on board and assist with ECD infrastructure would be misleading the nation. She appealed that there must be consideration for an infrastructure grant for Social Development, like Health and Education, because of the social infrastructure that was required to deliver services.

Chairperson’s concluding remarks

The Chairperson asked the national Department of Social Department whether they had highlighted the issue of a social infrastructure grant during the Budget Review and Recommendations Report (BRRR) processes, as that was the route to go, as well as through the Standing Committees on Appropriations in the National Assembly and the NCOP. They would take it up through their NCOP processes He also suggested it should be addressed at the MINMEC, and that their Minister should also inform the Minister of Finance.

It was very clear that oversight and intergovernmental relations would have to improve, and the systems in government, as well as coordination, also needed to improve. Good governance and sound financial management were key.

The meeting was adjourned.