2018 Budget Review & Recommendations Reports – BRRR
The Portfolio Committee on Public Works adopted its Budget Review and Recommendations Report (BRRR) on the performance of the Department of Public Works and the Property Management Trading Entity (PMTE) in the 2017/18 financial year.
Deliberations focused on recommendations to the Minister of Public Works. The Committee’s recommendations emphasise clean audits, reporting time lines, and annual and quarterly financial and performance reporting by the Department and entities such as the PMTE and Independent Development Trust (IDT). Recommendations address strengthening of entities by ensuring stable boards and personnel structures, minimising appointing of staff in acting positions and filling of vacancies in the Department of Public Works. Recommendations made reference to collection of outstanding moneys and strengthening the ability of the Minister to enforce payment of outstanding debts.
The Committee emphasised the urgency of completing the review of White Paper 1997 and 1999, the envisaged draft Public Works Bill, and amendment of the Construction Industry Development Board Act, Act 38 of 2000, and the Council for the Built Environment Act, Act 43 of 2000 with a view to addressing transformation of the construction and built environment. Recommendations aimed at eliminating auditing anomalies include the requirement that the review of the White Papers must address reporting on jobs created in municipalities, provinces and national departments so that the auditing anomalies are addressed and the regulatory powers of the Expanded Public Works Programme (EPWP) strengthened.
The Committee emphasised the importance of capacitated staff and ICT systems for intergovernmental coordination and data control, verification, and submission processes of the EPWP, and the requirement that the training component of the third phase of the EPWP has to be much more effective. Recommendations further address the development of more contractors from vulnerable sectors, reconfiguring the IDT into a state social infrastructure implementing agency, debt collection by the IDT, and appropriate appointment of personnel in key positions requiring financial management, financial control, and management and reporting.
Public Works Budgetary Review and Recommendations Report
The Chairperson indicated that the Committee would focus on Recommendations and verifying whether all amendments had been effected accurately. He thanked members for attending in numbers as they had done. He thanked Ms Adams, former member of the Committee, and serving in the Portfolio Committee of Tourism, whose attendance allowed the Committee to exceed the quorum requirement.
Mr F Adams (ANC) motivated that, because the Committee intended to adopt the report that day, the Committee deal with the report page by page, which could be done within 10 minutes, from page one onward, to allow members to indicate where they wanted text added or removed.
The Chairperson supported the proposal that every page we should have seen.
Mr M Filtane (UDM) proposed that the Committee deal with recommendations formally, one by one. He wished to propose amendments to text under Recommendations, and did not have a problem with the rest of the report.
The Chairperson ruled that the Committee would start deliberation on the Recommendations and then deal with the report page by page. He requested the content advisor present the recommendations and amendments of 16 October 2018.
The content adviser indicated that Recommendation 8.1 had been amended because the preceding paragraph had been removed. ''Audit'' was inserted after ''clean''.
Recommendation 8.1: Instruct the Office of the DG and the internal audit Committee to report to the Committee on a quarterly basis on its performance towards a clean audit. The focus should remain on the objective of the Turnaround Strategy to get clean (audit) reports across the public works portfolio. The DG to ensure regular quarterly performance reports submitted to the Committee throughout each financial year.
Mr K Sithole (IFP) queried the word ''instruct'' under Recommendation 8.1.
The content adviser explained that the recommendations were to the Minister, and that the Committee was not instructing the Minister, but rather saying that the Minister had to instruct the director-general.
Mr Filtane proposed that, if Mr Sithole was not comfortable with the wording, it could be amended to ''Ensure’’.
The Chairperson said that he understood Mr Ryder to be happy with the original version which indicated that the instruction would be directed to the office of the director-general.
Dr M Figg (DA) said that he agreed with the original wording, not the wording that was projected on the screen.
The Chairperson summarised that the Committee would retain ''instruct''.
Recommendation 8.2: Ensure that the PMTE reports to the Committee on a quarterly basis on the efforts to capacitate its financial controls and ICT systems to ensure proper management of government’s immovable assets in the immovable asset register.
The content adviser reminded the Committee that the ICT systems were what presenters had referred to as the enterprise resource system, ARCHIBUS and SAGE, that had been purchased. This also related to a later recommendation.
Ms E Masehela (ANC) proposed that ''in the immovable asset register’’ under 8.2 be deleted.
The Chairperson said that he understood the immovable assets were in the register, and the text was correct,
Dr Figg agreed with Ms Masehela, and preferred ''the immovable assets listed in the immovable asset register''.
Mr D Ryder (DA) said that it was not desirable to limit the immovable assets to those in that were recorded in the register (IAR), because not all assets were recorded in the register at the time. He therefore supported Ms Masehela's proposal that everything after ''immovable assets'' be deleted, since the Committee wanted all the information to be captured accurately and correctly, even the assets that had not been listed in the register at the time.
Mr Ryder also proposed that, because of the concerns he had raised the previous day about the Property Management Trading Entity (PMTE) appearing before the Committee every quarter, ''ensure that PMTE reports to the Committee'' be replaced with ''ensure that the PMTE submits a report'', which meant they would not necessarily appear in person.
The Chairperson agreed that it made sense economically, and requested input from members of the Committee.
Mr Sithole inquired whether the Committee was separating the PMTE from the Department and saying that only the PMTE had to submit without any consultation with the Department of Public Works.
The Chairperson replied that the PMTE was part of the Department, and the Department had to be present at all Committee meetings with entities reporting to the Minister of Public Works. The PMTE was different from others because it was too close to the Department, so it went without saying that the Department had to be there.
The Chairperson requested that recommendations also had to include the requirement that, besides the annual report, financial and general quarterly reports from the Department had to be submitted.
The content adviser indicated that reference to the Department’s quarterly performance had been included in another recommendation. The subheading was that recommendations went to the Minister to instruct the PMTE. A deputy director-general representing the Department always accompanied any entity that reported to the Committee.
Recommendation 8.3: Instruct the DG, the Head of the PMTE, and boards of the entities to ensure stable leadership in all key offices and bring an end to the proliferation of acting positions on its organograms.
The Chairperson agreed and motivated that it was also prudent to protect boards, since changing boards continually was as undesirable as appointing new Ministers frequently.
Mr Ryder indicated it was already included.
The content adviser said that the new Recommendation 8.4 could read that stability also had to be brought into the boards of entities, but if it did not, an additional reference that spoke to governance challenges related to the boards could be added to Recommendation 8.3.
The Chairperson confirmed that the reference to governance challenges related to the boards had to be inserted under Recommendation 8.3.
Mr Filtane proposed that reporting time lines for submitting an update to the Committee be added, unless it had been included in another recommendation.
The content adviser said that 8.3, as it was, addressed the matter fully. The Committee had material evidence that the boards did not quorate fully. Recommendation 8.3 addressed the PMTE, the Department and everyone in terms of governance issues.
Recommendation 8.4: That the Minister engage with National Treasury ... so that the IDT can collect management fees and all debt owed to it from client departments. The DPW and Treasury to report to the Committee before the Budget Vote process in the 2018-19 financial year on regulatory measures and action steps to ensure that all heads of department (HoDs), directors-general, accounting officers of departments and heads of organs in future pay fees owed in the financial year in which projects are planned and completed.
Mr Ryder, referring to ''engages with the National Treasury so that the IDT'' under Recommendation 8.4, suggested that was restrictive and perhaps limiting, and proposed that the Committee include 'investigate recourse in terms of the Intergovernmental Relations Framework Act, Act 13 of 2005'' with the reference to National Treasury. He clarified that it did not have to focus on Treasury because the IGR Act stated that there were other mechanisms where the Minister could lodge a formal interdepartmental dispute, therefore those options had to be investigated and the Minister should not only focus on going straight to the National Treasury, but also to speak to his debtors directly.
The Chairperson said that the Department, not Treasury, had the responsibility to use all means to collect. The Committee had to instruct them to make every effort to get their money, including what was referred to in Recommendation 8.4.
The content adviser clarified that the recommendation was not saying Treasury would collect on behalf of IDT. It was a coordinating department that had coordinating powers in terms of the Government Immovable Asset Management Act (GIAMA), Act 19 of 2007. A later recommendation referred to lack of legal power for the Minister, and it was important that the recommendation strengthen the ability of the Minister to enforce.
The Chairperson emphasised that they had to be trained to collect. It was important that the officials had a duty to collect. It was their job and they had to be instructed to do their work.
Ms Masehela said that she agreed with how the recommendation had been put.
Mr F Adams (ANC) agreed with the Chairperson, but noted that it did not work that way in practice. If the Committee did not employ strong tactics the people on the ground were the ones who suffered, because people were not being paid. There was an expectation on the Committee to do interventions. The Committee could intervene and address the officials who were not doing their jobs, and say the Committee could call the other departments. He had found that the only way in that government structure was to name and shame - it was part of oversight. An example was that an outstanding amount was paid a week before Committee conducted oversight. Therefore, if the Committee had done their duty, they had to ask why officials did not do their jobs, because when the Committee did oversight, things were done.
The Chairperson summarised that the Committee wished to include reference to engagement with Treasury as well as the responsibility of officials to collect outstanding money.
The content adviser said that the recommendation included reference to all officials, and that Recommendation 8.4 had been amended as follows: Engage with the National Treasury taking into account measures contained in the Intergovernmental Relations Framework Act, Act 13 of 2005, so that the IDT can collect management fees and all debt owed to it from client departments. These engagements to be reported to the Committee on interventions before the budget vote process in the 2018/19 financial year on regulatory measures and action steps to ensure that all heads of department (HoDs), directors-general, and accounting officers of departments and heads of organs in future pay fees owed in the financial year in which projects are planned and completed.
Recommendation 8.5: Ensure that the review of White Paper 1997 and 1999 is completed and that draft legislation towards the Public Works Bill is completed. Similarly, that the review is completed so that the CIDB and CBE legislation is amended and the transformation of the construction and built environment can be addressed more vigorously.
The content adviser reminded the Committee that the review of White Paper 1997 (Public Works towards the 21st Century - 1997) would give them a Public Works Bill which would give the Minister and his branches in the Department more legislative power to collect money as well as to enforce coordinating actions of other departments, in other words, payment of money and regulatory steps that needed to be taken. The 1999 White Paper spoke of amendments to the Construction Industry Development Board Act, Act 38 of 2000, and the Council for the Built Environment Act, Act 43 of 2000, which would deal with transformation in the construction and built environment. - The Committee therefore said that the Minister had to ensure that the review was completed, draft legislation towards the Public Works bill was completed, and CIDB and CBE legislation was amended so that transformation in the construction and built environment could be addressed more vigorously.
He said that Recommendation 8.7 dealt more specifically with what members of the Committee wanted around the Expanded Public Works Programme (EPWP).
Recommendation 8.7: Ensure that the intergovernmental coordination and data control, verification, and submission processes of the Expanded Public Works Programme (EPWP) has properly capacitated staff and ICT systems to prevent future adverse opinions from the Auditor-General.
Recommendation 8.11: Ensure that the IDT is appropriately reconfigured into a state social infrastructure implementing agency.
Mr Ryder intimated that the IDT reconfiguration referred to under Recommendation 8.11. would be a big task. They would first have to develop plan, because it would have to be negotiated with unions and the trust would have to be wound down or reconfigured , therefore the recommendation should rather require development of the plan. The reality was that there would be a process.
Chairperson asked whether the Committee agreed that there had to be a process which had to be reported.
Amendment of Recommendation 8:11 stipulated the requirement that a report on the reconfiguration process had to be submitted to the Committee in the second term of the 2018/19 financial year.
Recommendation 8.12: Instruct the IDT board to urgently appoint suitably qualified and experienced personnel in key positions where financial management, financial control, and management and reporting is required. In addition, that the process should enhance the entity’s ability to collect debt owed to it by client departments so that it can become self-sufficient.
Mr Sithole expressed concern that there was no recommendation dealing with filling of vacancies in the Department.
Mr Adams proposed that reference to filling of vacancies be added to Recommendation 8.3.
The Chairperson asked whether all members agreed to the amendments.
Mr Adams moved: That the Committee adopt the entire report if there were no further material amendments, and that members of the Committee deal directly with the content adviser about grammatical matters.
Mr Ryder, with reference to Recommendation 8.12, said that the quarterly financial reports about which the Chairperson had spoken had not necessarily been referred to elsewhere, because he did not see a request for submission of quarterly reports other than the one the Committee had asked for in the first item.
Mr Adams confirmed that the Committee wanted financial quarterly reports.
The Chairperson put the 2017/18 Budgetary Review and Recommendation Report of the Portfolio Committee on Public Works on the Performance of the National Department of Public Works and its Entities.
The Committee approved the BRRR.
Members of the Committee thanked staff for having completed the report in two days.
Consideration of Committee minutes
The Committee adopted its minutes of 5 June 2018; 9, 10 and 11 October 2018. The minutes of 5 September 2018 will be considered at a joint meeting with the Portfolio Committee on International Relations and Cooperation, and the minutes of 26 September 2018 will be considered at a joint meeting with the PC on Police. Consideration of the minutes of 4 September 2018 was postponed.
Minutes of 5 June 2018
The Chairperson put the minutes of 5 June 2018.
Ms Masehela moved: That the Committee adopt the minutes of 5 June 2018.
Mr Adams seconded the motion.
Minutes of 5 September 2018
The Chairperson said that the technicality about the minutes of 5 September was that the Committee had met jointly with the Portfolio Committee on International Relations and Cooperation He did not think it likely that the envisaged joint meeting would take place, and asked how the Committee wished to deal with the minutes.
Ms Masehela proposed that the Committee proceed with the minutes.
Mr Adams cautioned that the minutes had to be adopted at a joint meeting in terms of the Joint Rules.
The Chairperson ruled: That the Committee had participated and could verify whether the minutes reflected what had been decided, and that the minutes could be adopted at the joint meeting if it took place.
Mr Ryder, referring to paragraph 2 under Deliberations on p 3: ''There was a view that the Department of International Relations and Cooperation (DIRCO) should be given the responsibility to look after properties outside of the country.....'' said that there had been other views as well, and that the minutes implied that it was the general opinion, and he was not sure that that was the case.
Ms Masehela added that the Committee had said that the DPW had to be involved when it came to disposal of the properties.
Ms P Adams (ANC) added that the crux was that it had to be in line with GIAMA.
The Chairperson requested that those critical points be added to the minutes as the true reflection as per the understanding of the Portfolio Committee of Public Works.
Ms Masehela moved that, on page 3, under Resolutions, ''Photographs showing defects that had to be addressed at each building site that was visited had to be circulated to the members of both Committees'' be amended to ''Photographs showing defects that had to be addressed at each building site that was visited was circulated to the members of both Committees.''
The Committee secretary clarified that the resolution at the meeting was that the pictures had to be circulated, because the content adviser of the Committee of International Relations and Cooperation had brought some pictures that had been printed. The resolution had been taken because members needed to see more of those pictures that were printed, therefore the resolution was reflected correctly in the draft minutes.
The Chairperson ruled that the resolution would remain as it had been reflected in the draft minutes, and the Committees of the respective Committees would ensure accuracy.
Dr Figg expressed concern that it would be a challenge to approve minutes at a joint meeting since the minutes had not been drafted jointly, but had been written by the Committee secretary of the Portfolio Committee on Public Works. The Portfolio Committee on International Relations and Cooperation could not consider the minutes of the Portfolio Committee on Public Works.
The Committee secretary advised that she had drafted the minutes, that staff, together with the Committee secretary of the Portfolio Committee on International Relations and Cooperation, had gone through the edited version of the draft minutes before sending it to the respective content advisers, and both content advisers had checked the edited draft.
The Chairperson ruled that: The Committee had noted the last page, the Committee had indicated its amendments and for final confirmation would wait for the joint meeting to confirm the position of the Portfolio Committee on International Relations and Cooperation, and that the Committee would welcome a joint meeting to confirm the minutes.
Minutes of 26 September 2018
Ms P Adams (ANC) moved: That her name be removed from the attendance list on the first page, since she had not attended the meeting of 26 September 2018, and the minutes incorrectly indicated that she had been present.
Ms Adams said the attendance register would show that she did not attend, and requested to see the register.
Mr Ryder moved: On page 3, in the second paragraph, line 9, after ''duty to'' to delete ''ethnography''.
Ms Masehela moved:
- On page 4, paragraph 1.2., line 3, to delete ''been already'' and insert '' already been'';
- On page 4, paragraph 2. Deliberations, point 1, fourth line, to delete ''that'' be deleted and insert ''those'';
- On page 4, paragraph 2. Deliberations, point 5, third and fourth lines, to delete ''The Presiding Officers should have been explaining why the Committee was not established'' and insert ''The Presiding Officers should have been invited to explain why the Committee was not established''.
Mr Ryder moved: On page 5, paragraph 10, line 1, after ''there is a'' to delete ''challenging of searching'' and insert ''challenge when searching''.
Ms Masehela moved: That the minutes be amended to clarify that the challenge was that those responsible for searching vehicles had no shelter, especially when it rained.
Mr Ryder said that he would submit corrections for paragraph 11 to the Committee secretary directly.
Mr Sithole said that, although the minutes referred to ''the chairperson'' on page 6, the Committee had met jointly with the Portfolio Committee on Police on 26 September 2018 and the chairpersons had shared duties as co-chairpersons.
Dr Figg moved: That on page 6, in paragraph 4, to delete all occurrences of ''chairperson'' and insert ''co-chairperson'' in each case.
The Chairperson ruled: That the same approach had to be followed as with minutes of other joint meetings. The understanding was that the Committee had checked and corrected the minutes, that the Committee confirmed that the minutes reflected what had transpired, that the Committee did not adopt the minutes, but that the minutes would be taken to a joint meeting with the PC on Police, and that the Committee had a mandate to confirm its position at such a meeting.
Minutes of 9 October 2018
The Chairperson put the minutes of 9 October 2018.
Mr Adams moved: That the Committee adopt the minutes of 9 October 2018.
Ms Masehela seconded the motion.
Minutes of 10 October 2018
The Chairperson put the minutes of 10 October 2018.
Mr Adams moved: That the Committee adopt the minutes of 10 October 2018.
Ms Masehela seconded the motion.
Minutes of 11 October 2018
The Chairperson put the minutes of 11 October 2018.
Mr Adams moved: That the Committee adopt the minutes of 11 October 2018.
Mr Ryder seconded the motion.
Minutes of 4 September 2018
Dr M Figg (DA) pointed out that the Committee had just adopted the minutes of 5 June 2018 whilst the minutes of 4 September 2018 reflected that the Committee had already adopted the minutes of 5 June 2018.
The Chairperson ruled that the Committee had not contradicted its decision of 4 September 2018.
Mr Ryder moved that, since the document before the Committee indicated edits which were subject to change, consideration of the minutes of 4 September 2018 be deferred to a future meeting to allow staff to prepare an updated document.
The Chairperson thanked members of the Committee for their hard work and positive contribution.
The Committee adjourned at 10:53.
No related documents