The Committee was briefed by the Provincial Treasury (PT) on its first quarter performance for the 2018/19 financial year, and by the Western Cape Gambling and Racing Board (WCGRB) on factors responsible for the delays in securing appropriate accommodation.
Three high-level options had been considered for the WCGRB’s accommodation -- refurbishment of its current accommodation, reconfiguration of the existing offices, and leasing suitable premises. The PT had written a request to the Department of Transport and Public Works (DOTP) in July of 2016 to secure accommodation for the WCGRB. This had been an ad hoc request that was not captured in the User Asset Management Plan (UAMP) of the PT. In August 2016, the DOTP informed the WCGRB that Seafare House had been selected as accommodation and would be inspected for reconfiguration. The building was eventually occupied by the WCGRB, but the Board had later indicated that it no longer suited its purpose. This had compelled the DOTP to search for another site. The Alexandra Hospital site was considered the best property, but the project was discontinued due to non-budgetary provisions. In September 2017, the WCGRB proposed leased accommodation in Bellville as an interim solution. A considerable amount of time had been wasted between August 2016 to February 2017, as well as between September 2017 and January 2018.
The WCGRB’s presented its first quarter report, which indicated significant levels of under-expenditure. However, 11 of its 12 performance targets were achieved, and one was partially achieved.
Members expressed concern that the issue of the R17.6 million collected from WCGRB licence holders, discussed at the previous meeting, was not on the meeting’s agenda. They wanted to know who had been responsible for non-performance during the periods in question and if appropriate action had been taken against them. Who had been the service provider in charge of reconfiguration and space planning projects? What had it cost to engage the service provider? What were the recommendations of the service provider, and were they utilised? They criticised the under-spending on employee wellness, saying this should be prioritised and should not be restricted to an online platform. Over spending by the Board division could be avoided if all members were residents of the Western Cape, and it was proposed that the policy guiding the appointment of Board members should be revisited and clearly defined.
Members asserted that the Provincial Treasury was yet to rectify long-standing problems associated with budget under-spending in various provincial departments. There were still lingering challenges in various Departments in terms of supply chain management. Who was responsible for this, and how did the PT aim to address the matter? They pointed out that problems related to supply chain management were commonplace at most meetings of the Standing Committee on Public Accounts. Clarity was sought on the status of the bridge that connects Ashton and Montagu, with Members arguing that the PT should not have allowed such an enormous project to be implemented on an experimental basis in the Western Cape. Would smaller sub-contractors be working in consultation and collaboration with the main contractor?
The Chairperson said the meeting would focus on presentations by the Provincial Treasury (PT) on the Western Cape Gambling and Racing Board’s (WCGRB’s) first quarter performance, as well as the Board’s accommodation delay. He conveyed apologies on behalf of the Provincial Minister of Finance, Dr Ivan Meyer.
Mr P Uys (ANC) asked the Chairperson why the issue of the R17.6 million collected from WCGRB licence holders, discussed in the previous meeting, was not on the meeting’s agenda.
The Chairperson said that he wrote the PT on the matter and received an appropriate response, including a reply to the casino matter raised in the newspapers. He had promised that the Committee will address the matter before the end of the year. He commended the efforts of the Department of Transport and Public Works (DOTP) to secure accommodation for the WCGRB, and urged the Department to use the lessons learnt to improve future performance. He hoped that the meeting would finalise the efforts by the DOTP to secure accommodation for the WCGRB based on the reports and findings presented by Advocate Chantal Smith, Chief Financial Officer: DOTP.
Department of Transport and Public Works: WCGRB accommodation
Advocate Smith tendered apologies on behalf of Ms Jacqui Gooch, Head of Department (HOD): DOTP, who was in another meeting. She presented a report compiled for the DOTP on the past two years in regard to the accommodation of the WCGRB. Three high-level options were considered for the accommodation of the WCGRB. The first involved investigation of refurbishment of the WCGRB’s current accommodation. The second option dealt with the reconfiguration of existing offices, and the third dealt with leasing of accommodation for the WCGRB.
The PT had written a request to the DOTP in July of 2016 to secure accommodation for the WCGRB. This was an HOD-to-HOD ad hoc request that was not captured in the User Asset Management Plan (UAMP) of the PT. The terms of the accommodation had been captured and communicated by the UAMP. The UAMP was compiled by the DOTP, giving due consideration to the Department’s budget. The request envisaged optimisation of existing space in a way that suited the WCGRB’s purpose. Various stakeholders, including the DOTP, PT, WCGRB, General Infrastructure (GI) and other departments were engaged to address key issues that might affect the accommodation of the WCGRB. The GI was involved to determine the right configuration of the facility.
In August of 2016, the DOTP informed the WCGRB that Seafare House, the current accommodation of the WCGRB, would be inspected for reconfiguration. The DOTP also informed the PT in August of 2016 that a service provider (SP) had been appointed to handle space management of Seafare House in consultation and collaboration with the WCGRB. Nothing significant happened from August of 2016 till February 2017, which amounted to waste of time. The only activities that occurred were restricted to the SP, the planner and the WCGRB, who looked at the layout and possible reconfiguration of existing space. The WCGRB later indicated that Seafare House was not suitable for its purpose. In March of 2017, there was an investigation of a relevant provincial site to construct purpose-based accommodation for the WCGRB.
In May 2017, the Provincial Property Planning unit and GI conducted visits to potential sites, including the Alexandra Hospital truck site, to find a space suitable for the purposes of the WCGRB. The outcome of investigation was released in May 2017, and the preferred choice was the Alexandra Hospital site. The GI completed office rectification to ensure that the facility served the existing organisational structure of the WCRGB. It was discovered in July of 2017 that the project was not accommodated in the baseline budget of GI, and this had led to discontinuation of the project.
In September of 2017, the WCGRB proposed urgent repair of an existing building in Bellville as an interim solution to its accommodation needs. In a letter dated September 27 2017, the WCGRB wrote to the DOTP through the PT regarding the need for interim accommodation.
In January of 2018, the HOD of DOTP informed the PT that her Department was set to embark on repairs, provided necessary funding was available from the PT. The DOTP then ensured necessary measures were in place to facilitate the repairs.
Advocate Smith commented that there had been a waste of time between September of 2017 and January of 2018, for no justifiable reason.
Mr R Mackenzie (DA) wanted to know who was responsible for the inactivity during the stated periods. Was action taken against them? Was there any checklist of challenges encountered in order to forestall future recurrence in the Department, or other government entities?
Ms C Beerwinkel (ANC) commended the presentation for its detail. She asked when Advocate Smith had assumed her current functions. She commented that the WCGRB had indicated that Seafare House did not suit its purpose in February of 2017, and that between September and October of 2017 the WCGRB had proposed urgent repair and an interim rental solution. Why had it proposed urgent repair when the building did not suit its purpose, and why was the PT requested to fund repairs?
Mr Uys expressed concern about urgent infrastructure needs, as mentioned in the presentation. Did it mean that the WCGRB staff establishment had not been not accurately captured during space planning and reconfigurations?
He observed that GI had completed office rectification, and all of a sudden the project was not provided for in GI’s baseline budget in July of 2017. This was a concern, as the challenge could have been spotted earlier than July of 2017. The decision to stop the project must have resulted in a waste of time and resources. What happened between May and July of 2017?
Ms Beerwinkel was concerned that the ad hoc request was verbal in nature and never covered in the UAMP. She urged Advocate Smith to present the outcomes of various investigations to the Committee. Who was the service provider? What did it cost to engage the service provider? What were the recommendations of the service provider, and were they utilised?
Advocate Smith said there were no justifiable reasons for non-performance during the periods in question. It meant somebody had not worked on the file during the periods identified.
Mr McKenzie asked if the file given to Advocate Smith had any name on it. Had the person been disciplined?
Advocate Smith said the person no longer worked in the DOTP. A significant shift had occurred in that component of the DOTP. There had been a significant improvement in that component under her watch, and a backlog of over four years had been cleared. The entire component was undergoing training to ensure necessary restructuring, to avoid a similar occurrence in future. She had assumed her current position in October of 2017.
She said maintenance was part of the requirements of the building currently occupied by the WCGRB. Apart from repair needs, the WCGRB indicated that the building was no longer suited for its use. The repair was not part of the UAMP of the DOTP, so it could not be captured in the current financial year.
The request to the PT was to fund users, not for maintenance. The DOTP aimed for government entities to occupy their own buildings instead of leased accommodation. This enhanced sustainability of provincial portfolios, as opposed to leased accommodation. The DOTP really depended on lessors to ensure appropriate health and safety, as well as the reconfiguration requirements, in leased properties.
In response to Ms Beerwinkel’s question, Advocate Smith said the law required the DOTP to consider the potential of property for reconfiguration before such structure could be approved for a specific purpose. The service provider had been appointed to investigate the existing property for possible reconfiguration. The service provider had submitted its findings and it was decided that the reconfiguration did not align with the WCGRB’s interests. Therefore, the appointment of the service provider and the reconfiguration were not wasteful expenditure.
She said there were no additional infrastructural needs. The most important things were an enabling environment for staff, a boardroom and a break-away room, depending on the preference of the WCGRB. It needed leased accommodation as an interim solution because the current building was no longer suitable for its purpose. The interim solution was essential, as a purpose-based building takes time to plan and finalise. The PT had been requested to fund only the interim lease.
Ms Beerwinkel asked if certain things could have been done simultaneously to safe time. It was glaringly obvious, from the outset, that the current accommodation was not suitable for the WCGRB’s purposes. Why was the option of a lease not considered at inception, knowing full well that the current accommodation was not suitable and would be vacated? The PT should take responsibility for the waste of time. Who was responsible for costing the project? Was it the PT, the DOTP or the WCGRB?
Mr Uys commended the effort of the Standing Committee to resuscitate the push to get suitable accommodation for the WCGRB. He condemned how the accommodation matter had been handled, however. The Committee had made a recommendation to the WCGRB, but the recommendation had not been accepted.
Mr McKenzie wanted to know the persons responsible for the waste of time. Were they still in the DOTP? Had the section been retrained to avoid future recurrence?
Mr Uys said the problem was not individualistic. It really showed a deficiency on the part of the PT and the DOTP. Both of them had not done the right thing. The Standing Committee had a duty to compel entities to do the right thing.
The Chairperson agreed that there had been unnecessary delays. He also commended the Standing Committee for its effort to open the debate, and for Advocate Smith’s transparency on the whole matter.
Advocate Smith said the UAMP was determined by clients to meet their needs. It required planning to know if the request/proposal could be accommodated within the existing budget. The individual responsible for non-performance no longer worked in the DOTP. The entire section had undergone retraining and structures had been put in place to avoid a repeat in future.
The Chairperson requested Advocate Smith to address the Committee on what to expect from the project.
Advocate Smith said that the lease commenced on November 1 2018.
Mr Shane Hundley, Director: Removable Asset Management: DOTP said that the building would be vacated and refurbished to meet the requirements of the WCGRB. The anticipated date for the finalisation of the process would be towards the end of the year. Therefore, the Committee could inspect the building in the New Year.
Mr David Lakay, Chairman: WCGRB, thanked all stakeholders and role players for their efforts to make the accommodation of the Board a possibility.
WCGRB: First Quarter Report
Ms Zoe Siwa, Chief Financial Officer (CFO): WCGRB gave a breakdown of the WCGRB’s expenditure as at June 30 2018. This was reflected as follows:
- Board’s expenditure: R319 296 (budget R307 454);
- Executive: R1 828 582 (budget R2 650 370);
- Administration and Finance: R2 128 874 (budget R3 690 037);
- Licensing: R2 766 801 (budget R3 195 071);
- Gambling and Betting Compliance R3 439 266 (budget R3 851 954); and
- Information Technology R1 226 660 (budget R4 299 34).
The Board’s over-spending was due to travel and subsistence costs. This was mainly due to board members having to travel to the Western Cape from Johannesburg. Executive under-spending was mainly due to legal fees, responsible gambling awareness, training and employee wellness. Ms Siwa said that two separate trainings had been received at the University of Las Vegas. Under-spending in Administration and Finance was due to the purchase of motor vehicles, rental expenditure in respect of new accommodation, audit fees and consultants. Under-spending in licensing resulted from employee-related costs in respect of a timing difference. Under-spending in Gambling and Betting Compliance was also due to employee-related costs. A legal compliance officer was appointed recently and only a single vacancy was left. Under-spending in Information Technology was due to the initiative of automated licence application system (ALAS). R2.2 million had been budgeted for ALAS.
The Board had submitted its first quarter performance report in compliance with the submission dates as guided by the Department of Performance Management and Evaluation (DPME). Twelve performance targets had been planned for the quarter. Eleven had been achieved and one was partially achieved.
Mr McKenzie expressed concern about under-spending on employee wellness, given the high rate of depression in recent times. He urged the WCGRB to give attention to all components that affected employee wellness. He asked why it took so long for the second vacancy to be filled.
Mr Uys sought clarity on the budget. The quarterly and overall budget must be distinguished and clearly explained. He was concerned about the allowance and subsistence paid to board members. He remarked that a condition for the appointment of board members was that they had to be a resident of the Western Cape. He was surprised to learn that an enormous cost had been incurred to get board members into Western Cape. He also sought clarity on the responsible gambling awareness campaign. He urged officials of the WCGRB to explain why it had under-spent its budget for the executive division by 21%. He believed the employee wellness programme was handled by private service providers, who should get paid on a monthly basis, so he did not understand how the WCGRB could under-spend in this regard. On administration and finance, how many motor vehicles did the WCGRB wish to purchase? What was WCGRB policy in terms of vehicle use? Did the money for rentals come from the PT or the WCGRB? He wanted to know the amount spent on rentals per annum.
Regarding information technology, Mr Uys spoke briefly on the importance of the WCGRB to work on the Automated License Application System. He expressed concern that only R1 226 660 had been spent out of the R4 299 341 budgeted for this division.
He asked if there had been capital expenditure that was not reflected in the presentation. He questioned the economic classification adopted by the WCGRB -- was there any shift between salary, goods and services? How did it achieve income or revenue for the year? Had it reached its revenue target for the first quarter?
The Chairperson asked if the WCGRB had a quarterly target for revenue.
Ms Beerwinkel asked about the role of Government Motor Transport (GMT) in the WCGRB’s finances.
Ms Siwa said the WCGRB would incur significant cost towards the end of the year in terms of the awareness programme of responsible gambling. This cost covered labour expenditure and advertisements.
She said the WCGRB could not purchase the two vehicles budgeted for, due to the non-availability of space. Staff were currently required to use personal vehicles, after which they are reimbursed based on the number of kilometres travelled. She said R3.14 million had been budgeted for rental in the current financial year. The under-spent amount was calculated by dividing R3.14 million by twelve and then multiplying it by three.
With regard to licensing, the employee-related cost was factored into the budget. The under-spending in first quarter arose from time constraints associated with the budget, and back payment was made in second quarter.
In the area of information technology, the WCGRB had budgeted R3.2 million for the Automated Licensing Application System. There had been significant progress in this regard. The WCGRB had appointed a service provider and significant cost would be incurred in this regard.
She said the WCGRB gave importance to quarterly budgets because they help to focus attention and resources on what happens within a given quarter. In terms of economic classification, she said salary was treated separately from goods and services.
She told the Committee the Board would treat over-spending differently from under-spending in future discussions.
Mr Lakay said that the service providers were in the planning phase of the project. Project execution followed planning. The planning phase, which had delayed expenditure in the information technology division, was almost completed.
Regarding income for the first quarter, Ms Siwa said the WCGRB had collected R10.9 million instead of the budgeted R11.2 million revenue.
The Chairperson sought clarity of the status of the service provider appointed to handle the information technology division. Was it a sole service provider or were sub-contractors involved?
Ms Siwa said there was only one service provider.
Mr Primo Abrahams, CEO: WCGRB, said that there had been over-spending in the Board division because the WCGRB had had to pay for flight and subsistence of Board members who were not resident in the Western Cape.
Mr William Bowers, Human Resource Manager: WCGRB, said expenditure was expected to be incurred in second quarter, considering the responsible gambling and betting awareness campaign that was planned. The training programmes, in collaboration with the University of Las Vegas, were scheduled for the first quarter but took place only in the beginning of the second quarter. This was one of the factors responsible for under-spending. Regarding under-spending on employee wellness, he agreed with Mr Uys that a specific amount of money had been set aside for the service provider for specific purposes, especially counselling sessions. However, the WCGRB had also made plans for contingency purposes. This had resulted in under-spending with respect to employee wellness. He said the WCGRB aimed to ensure that the vacancy in question was filled as soon as possible.
Ms Beerwinkel asked what WCGRB covered in its employee wellness programme.
Mr Uys reiterated that improper planning had led to under-spending in the information technology division. He asked who the person or service provider responsible for planning activities within the division was. He said that the criterion of ‘ordinary residency’ of Board members in the Western Cape should be revisited and clearly defined. He maintained that Board members should be personally resident in the Western Cape for a good portion of their time in order to avoid unnecessary expenses. He questioned why the WCGRB had budgeted for awareness of responsible gambling and betting in the first quarter when it knew well ahead of time that the programme would take place in the second quarter. He sought clarity on the budget allocation within the various divisions of the WCGRB. Was the budget different for each quarter, or divided equally (25%) for each quarter? He wanted the WCGRB to provide figures of taxes and revenue for the period in question.
Mr Lakay said the under-spending recorded in the information technology division was not deliberate. The WCGRB had spent an extended time to ensure the selection of the best service provider, giving due consideration to the most appropriate pricing and its expectations. Also, unforeseen situations may cause delay in the implementation of plans.
He said the WCGRB reported on tax collection to the Casino Committee. It had met the tax collection mandate as contained in the budget of the Provincial Treasury.
Mr Abrahams said that the employee wellness programme was two-fold. There was an online platform from the service provider that enabled employees to register their profile online. The service provider utilised the information to design specific programmes to assist the employees. The service provider also offered free quarterly programmes. The WCGRB acted on recommendations and sought the best ways to assist employees.
Ms Siwa said eleven out of the twelve performance targets were achieved in the first quarter, while one target was partially achieved. The partially achieved target was related to the number of compliance assessments conducted at licensed gambling premises. 296 assessments were achieved out of the planned 300 assessments. The reasons for non-performance of certain targets included the FIFA World Cup that took place in June, and the annual Vodacom July racing event. The bookmakers had submitted a number of promotions and advertisements relating to the World Cup. Some of the promotions were complex and had taken a considerable time to handle. This had led to an inability to do all inspections.
Ms Beerwinkel asked what strategy was adopted by the WCGRB to detect employees who struggled with specific health challenges. It should have a way to spot employees who needed assistance and devise adequate measures to address their needs. Employee wellness should not be restricted to online resources alone.
Mr Bowers said that the service provider did everything necessary to address the specific health needs of employees, based on the information available on the online platform. The Board, however, intervened where necessary to address employee matters that were not covered by the service provider. The employee reserved the right either to disclose or keep personal information.
Mr Uys sought details of the performance target achieved by the WCGRB under the administration and finance division.
An official of the WCGRB said that the Board had community engagements and enlightened people on both illegal and responsible gambling. The under-spending in the division was not associated with the functions performed by the WCGRB. It was associated with literature and other support structures.
The Chairperson congratulated the WCGRB on the finalisation of the new accommodation.
Provincial Treasury: First quarter performance report
Mr Theo Mahlaba, Acting Chief Financial Officer: PT, gave a breakdown of the first quarter performance report of the Provincial Treasury.
A total expenditure of R317 966 000 was projected for the financial year 2018/19. Expenditure to date was R48 998 000, representing 15% of the budget. Due to the late filling of posts and loss of employees to other establishments, the PT had under-spent R7 424 000 million. Administration had spent 20% of its budget, Sustainable Resource Management 11%, Asset Management 17% and Financial Governance 19%. The bulk of programme 2 (Sustainable Resource Management) involved transfer payments to municipalities and the WCGRB. The office of the Minister had under-spent by R33 000, Management Services by R1 813 000, and Financial Management by R83 000 during the first quarter. In terms of Sustainable Resource Management, programme support under-spent by R518 000, fiscal policy by R319 000, budget management by R30 000 and public finance by R2 539 000. Expenditure was expected to pick up during the second and third quarters of the financial year. In programme 3 (Asset Management), programme support under-spent by R392 000, supply chain management by R673 000 and supporting and interlinked financial systems by R115 000. The overall actual amount spent on programme 3, as a percentage of budget stood at 17%. The overall actual amount spent on programme 4 as percentage of budget stood at 19%.
The HOD informed the Committee that the PT would investigate the under-spending recorded in some of its components. The reasons for under-spending on key expenditure items may include recruitment, employee loss due to attrition, and so on.
The Chairperson commented that transfer payments were usually made to municipalities in the second quarter. He asked if the payments were made timeously so that municipalities and other befitting entities could implement their plans. He also sought clarity on the filling of vacant positions. What was the highest level of currently vacant positions?
Ms Beerwinkel expressed concern that the Provincial Treasury was yet to rectify long-standing problems associated with budget under-spending in various provincial departments. There were lingering challenges in various departments in respect of supply chain management. Who was responsible, and how did the PT aim to address the matter? She said that problems related to supply chain management were commonplace in most meetings of the Standing Committee on Public Accounts (SCOPA).
Mr Uys asked how the PT aimed to do transfer payments to different departments and entities. How much would be transferred to the beneficiaries? He asked them to highlight transfer payments in programme 2 that were less than 20%. On supply chain management, he sought clarity on the 17% of the actual budget spent. Was this linked to the procurement processes of various departments? How did the PT help to alleviate the plight of struggling businesses within the province? The PT needed to be proactive, not reactive, in its response and intervention. They should look into the various challenges the departments faced and provide comprehensive solutions. Why was 18% of the budgeted amount spent on corporate governance? What would the future spending look like?
Provincial Treasury’s response
Mr Zachariya Hoosain, Head of Department (HOD), Provincial Treasury, in response to Ms Beerwinkel’s questions, said that the PT looked into the critical challenges that affect the compensation of employees, the filling of critical positions, and expenditure on good and services, and provided appropriate solutions. The PT put necessary measures in place to ensure sustainable recruitment over the given medium term expenditure programme (MTEF) period. Critical positions were now fully funded and the PT was ready to fill the positions over the MTEF period. However, notable challenges were encountered through changes within the Departments. These were not normally captured in the baseline budget. Going forward, the PT aimed to account for this in future budgets in order to reduce the gap between the actual expenditure and the baseline budget. He said people left the Provincial departments for various reasons.
Mr Harry Malila, Deputy Director General (DDG): Fiscal and Economic Services, PT, said that transfer payments to local government authorities were made mainly in the second and third quarters. A significant portion of funds in the fiscal policy went to the WCGRB. Two transfers were usually given to the Board of WCGRB. Half of the transfer occurred in second quarter and the rest went through in the third and fourth quarters. The WCGRB used funds it generated to fund its activities in the first and second quarters. The WCGRB informed the PT on the appropriate time to make the transfer payments.
A significant amount of transfers went to the municipalities at the beginning of the financial year. For the current financial year, the PT was in the process of signing relevant documentation, after which transfers were made to municipalities. It worked closely with the Department of Local Government to determine how transfer payments were made to municipalities.
Regarding under-spending, Mr Malila noted that not all programmes were implemented linearly. An example of a non-linear programme was the budget management programme, where a significant portion of expenditure was made in the third and fourth quarters.
Mr Isaac Smith, Acting Branch Manager: Governance and Asset Management, PT, said that the under-spending in programme 4 was related to the compensation of employees (CoE). In addition, most training and programmes in municipalities were just gathering momentum and a lot of expenditure would be made going forward. CoE also played a significant role in under-spending in programme 3. The PT had lost a lot of staff to municipalities, and was currently developing measures to retain them.
Regarding supply chain management (SCM), the departments have an e-procurement system. The PT not only has oversight of the SCM of every department, it also ensured compliance with relevant regulations. The PT provided procurement training and gave performance indicators to the departments. It also identifies risks to local businesses in the Western Cape as far as supply chain is concerned. The PT had warned the National Treasury that certain regulations had the potential for causing adverse effects on local businesses in the Western Cape. He added that the PT has contingency plans in place which allow small contractors to replace large businesses in cases where the large businesses fail to perform. This has a positive effect on service delivery in the Province.
Mr MacKenzie commented that the movement of employees from the PT to municipalities may actually work to the advantage of municipalities. He asked about the status of employees who had left the PT for municipalities, and the impact of the movement on the PT.
Ms Beerwinkel asked when the PT had discovered that the main contractor was not delivering on the bridge project that linked Ashton and Montagu. She observed that the main contractor was building a specialised bridge, which might be complex for sub-contractors to handle. Were the sub-contractors working in isolation or in collaboration with the main contractor?
Mr Uys expressed concern about why the PT had allowed such a huge project to be implemented as an experiment in the Western Cape at an exorbitant cost to tax payers. He said that the PT should not have allowed the National Treasury to initiate such a project, given the past history of such initiatives.
The Chairperson remarked that Mr Uys’ questions had both financial and technical connotations and should be directed to the Department of Transport and Public Works, not the PT. However, he gave the PT the opportunity to respond to the question.
Mr I Smith, Head: Asset Management, PT, said the Treasury lost staff not only to municipalities and other departments, but also to the city. It had lost four to five staff to the City of Cape Town (CoCT) in recent times due to the massive restructuring initiated by CoCT. Staff loss was not peculiar to the PT. The Departments of Health and Transport and Public Works also losts staff to other entities.
He said the DOTP was in a better position to answer the questions on the construction of the bridge that linked Ashton and Montagu.
Provincial Treasury’s non-financial performance
Ms Ruzelle Julie, Acting Director: Strategic and Operational Support, PT, presented the non-financial performance of the PT to the Committee.
The Department had submitted its first quarter report, complying with the DPME submission date. Of the 42 planned targets, 38 were achieved. There was an overall of 90% achievement for the first quarter. Two targets, representing 5% of targets, were partially achieved during the first quarters. Two targets, representing 5% of targets, were not achieved during the first quarters mainly due to technical delays, and the targets were achieved in the second quarter. Under the administration programme, six out of seven targets were achieved. This represented 86% performance, and 20% of the budget was spent to date. Under the sustainable resource management programme, 11 out of 14 targets were achieved. This represented a 79% performance, and 11% of the budget was spent to date. All targets under the asset management programme were achieved and 17% of the budget was spent to date. Also, all targets under financial governance programme were achieved, and 19% of the budget was spent to date.
Ms Julie said none of the targets regarding the number of reports on the implementation of the workforce plan had been achieved. This was due to the complexity of the sign-off process. Sign-off of the report occurred only on July 19 2018 due to the progress on the implementation of the actions of the workforce plan, which was discussed at a top management meeting only on July 19. The sign-off had to be extended to the end of July because of the number of people and the complexity involved.
Ninety-two out of 93 targets in respect of the number of monthly In Year Monitoring (IYM) assessment reports on the implementation of the municipal budget were achieved. The one under-achievement resulted from the failure of Kannaland to submit the report for May. A non-compliance warning was issued to the municipality and follow-ups were done, which included a visit to the municipality. The municipality had subsequently submitted the information of the month of May, which formed part of the second quarter report.
She said 20 out of 21 targets in respect of the number of infrastructure expenditure reports assessed, were achieved. The only recorded under-achievement occurred as a result of the inability of the PT infrastructure to access the web-based IRM system of the Department of Social Development. The Department of Social Development could not complete the population of its data on the system timeously due to system challenges.
None of the targets for the number of quarterly reports on the implementation of infrastructure budgets to Cabinet was achieved. The reason for the deviation was because the Cabinet went on recess on June 22. She promised the Committee that targets would be achieved in the second quarter.
Reacting to the non-implementation of the workforce plan, Ms Beerwinkel asked why the PT had set the target when it knew well ahead of time that the target would not be achieved. Why did the Department of Social Development have challenges with one of the systems that is considered the best in the country? She urged the PT to factor the Cabinet’s recess into its plans. Given 100% achievement in the number of municipality budget assessment reports, she wanted to know how the PT had detected that Kannaland did not submit a report in May.
Mr Uys said the fact that Cabinet went on recess should not be an excuse for non-performance in terms of the targets set out under infrastructure. The targets were set by the PT, and the PT should ensure their achievement.
Ms Julie said that the workforce plan had been discussed in a top management meeting scheduled for July 19. She said that the final date for the quarterly performance report (QPR) was the end of June. The sign-off was scheduled from June 19 to June 30. Sign-off was concluded timeously and had to be extended into July due to the prolonged nature of the process.
Mr Malila said that the number of municipality budget assessment reports formed part of the PT’s oversight and commentary process that occurred in April and May on an annual basis. The PT had received 92 cumulative performance reports in the first quarter. Kannaland had not submitted its report timeously. It had subsequently submitted its report, which would form part of the second quarter report. The PT issued a compliance letter to any municipality that did not submit reports timeously.
He noted that this was the first time an infrastructure grant was given to the Department of Social Development. The PT could not access the system due to a shut-down. The PT had populated the project data manually, and all this would form part of the second quarter report.
Ms Julie said overachievement in the number of interventions performed to assist departments with continuous improvements of their supply chain and asset management systems, was due to detected gaps in the reports that various departments submittted to the PT. It intervened because it had the necessary tools to address the gap. Part of its intervention dealt with the use of the reporting tools and linking expenditure to budget.
She said delays at the start of the financial year usually pushed procurements into the last quarter of the financial year. The PT’s interventions, in this respect, included holistic procurement planning that helped to ensure that procurements by different departments were done timeously and effectively.
The meeting was adjourned.