DPWI audit outcomes: AGSA briefing; DPWI, PMTE & Entities 2019/20 Annual Report; with Minister

Meeting report

AGSA: DPWI portfolio audit outcomes

Ms Tintswalo Masia, Senior Audit Manager: Public Works portfolio, Office of the Auditor-General (AG), commended the Council for the Built Environment (CBE) on maintaining a clean audit. The Department of Public Works, Agrément SA (SA) and the Construction Industry Development Board (CIDB) remained stagnant, with unqualified audit outcomes with findings on other areas. 

The Property Management and Trading Entity (PMTE) also remained stagnant, with a qualified audit outcome. She reported that if drastic measures were not taken, given the increased areas of qualification this year, the entity might regress in the following year.

Unauthorised expenditure in the portfolio remained the same as the previous financial year – R261 million. R83 million was due to overspending of the vote or a main division within a vote not approved by National Treasury. R178 million was due to expenditure not in accordance with the purpose.

There was a marked decrease in fruitless and wasteful expenditure compared to the previous financial year. The majority of F&W expenditure was caused by a motor vehicle accident claim that was repudiated, amounting to R60 736.

There was a marked increase in irregular expenditure compared to the previous financial year - in 2019/20 it stood at R423 million compared to R18 million in 2018/19. R23.6 million relates to Beitbridge border project where the emergency delegation was invoked and the investigation found the reasons to utilise the emergency delegation was not justifiable. R23.3 million relates to irregular appointment of officials during 2017-18 as identified by Public Service Commission investigation. The irregular expenditure represents the salary of these officials for 2018-19 and 2019-20

It had been noted that leadership should enhance oversight and adopt a zero-tolerance approach when it came to non-compliance with legislation. The starting point for this would be to address the repeated non-compliance with laws and prescripts reported in prior years.

[See presentation attached for further detail]

DPWI 2019/20 Annual Performance Report

Mr Imtiaz Fazel, Acting Director-General, and Mr Lwazi Mahlangu, Acting Deputy Director-General: Governance, Risk and Compliance, Department of Public Works and Infrastructure (DPWI), briefed the Committee on the Department’s 2019-2020 annual performance.

The Committee was informed that the DPWI had obtained a 61.8 % performance rate for the year under review, and that it had again received an adverse audit finding from the AG.

On the audited outcomes for the Expanded Public Works Programme (EPWP) it was reported that enough appropriate audit evidence could not be provided in some instances while in other cases, the supporting evidence provided did not agree with the reported achievements in the Annual Report.

On the compensation of employees (CoE), it was reported that this was underspent due to a delay in filling vacant positions and positions that became vacant during the financial year.

Public Entities’ Annual Reports

Mr Molatelo Mohwasa, Acting DDG: Inter-Governmental Coordination, DPWI, briefed the Committee on the annual reports for the entities under the purview of the DPWI. These entities are:

Agrément South Africa (ASA), listed as a Schedule 3A public entity in terms of the Public Finance Management Act (PFMA).
Council for the Built Environment (CBE), listed as a Schedule 3A public entity in terms of the PFMA;
Construction Industry Development Board (CIDB) listed as a Schedule 3A entity in terms of the PFMA;
Independent Development Trust (IDT), listed as a Schedule 2 major public entity in terms of the PFMA

The Council for the Built Environment (CBE) had 19 annual targets, with 12 annual targets achieved and seven targets not achieved. This constituted a 63% achievement of the annual targets.

The CBE obtained a clean audit in 2018/19, 2017/18 and 2016/17.

The Construction Industry Development Board (CIDB) received an unqualified opinion, with findings in other areas. The main challenge that hindered the entity from obtaining a clean audit was the quality of the annual financial statements and the annual performance report received for auditing purposes. 33 findings had been raised, with 10 being resolved.

[See presentation attached for further detail]

Discussion

Ms A Siwisa (EFF) expressed her worry in relation to the challenges at the entities of the DPWI. She cited several instances of these challenges, and noted that it seemed as if the Property Management Trading Entity (PMTE) was regressing as well.

She recalled the adverse opinion that had been received as a result of the month-to-month leases undertaken by the DPWI. She expressed her concern with the month to month leases, as it had been shown that there had been an overpayment of almost 10%. The AG had told the Committee about the month-to-month basis of the leases since 2014. This was a bit of a concern, with the extra 10% in money being paid. She also recalled slide 17 of the DPWI’s presentation that dealt with the latter’s operating liabilities. According to the DPWI, guidelines had been introduced to deal with the month-to-month lease issue. She wanted to ascertain whether these guidelines included the recommendations of the AG. She cited irregularities such as overpayments as just one example. She requested the DPWI to indicate what had been to done in this matter and whether any officials had been held to account. She also referred to the quarantine sites fiasco.

She said there had been an increase in fruitless, wasteful and irregular expenditure, and expressed her concern with this development as well. She once again recalled that the AG had mentioned that this money had to be paid back. She wondered who would assume responsibility, especially in relation to the Beitbridge border fence. She asked whether the implicated contractor had any intention of repaying the state.

On the irregular expenditure related to the construction of schools, she requested the DPWI to provide a list of the regions/municipalities where these schools were located. She wanted to establish whether these schools had in fact been built. She recalled many instances where money had been budgeted and spent on projects where no work had commenced. She commented that Minister De Lille had said that these incidents would not happen again, and yet they were still happening. She called on the Committee to conduct oversight visits to the Eastern Cape, North West and Kwazulu-Natal to ascertain whether these projects had been finalised.  She once again recalled the issues raised by the AG.

She decried the fact that the Committee still had not been furnished with the list of all the quarantine sites. This failure had been set against the background of double payments. She also cited the challenges experienced with the immovable asset register. She asked whether the asset register had consistently been updated. She also wanted to know what the status had been on title deeds. How sure was the DPWI that it would not include property that belonged to other people?

Ms M Hicklin (DA) referred to the Covid-19 quarantine sites, and said that these sites had not been available to people who had entered South Africa from March to September. She asked that this matter be investigated when the double payments were reviewed.

She thanked the presenters for the comprehensive reports, and mentioned that she would have liked to have had more time to peruse all the documentation. There had been considerable problems with the entities under DPWI’s banner, and the AG had once again concluded that there had been wholesale disregard for prescripts, such as the incidence of misstatements. This was a serious indictment on the DPWI.

She also referred to slide 36 of the presentation and took issue with the continued irregular expenditure commenting that whilst the figure might have been brought down, Members should not be distracted, as the figures from the 2018-20 financial year were still astronomical.

Ms Hicklin decried the lack of oversight over payments. In the case of the PMTE, payments had been made well in advance of the actual work being delivered. This was the easiest way for money to be siphoned from the government’s purse. She said that the DPWI bled money like a sieve.

On goods and services, she wanted to ascertain where the supply chain and procurement unit considered variables such as equity and value for money. She referred specifically to the Beitbridge border fence that had proved to be a colossal and expensive exercise in futility.

In the case of the PMTE, she recalled that the entity had an overdraft of R2.6 billion, with liabilities that exceeded R9 billion. In addition to this, the overdraft facility for the PMTE had been increased, yet projects had been delayed. She echoed Ms Siwisa’s concerns that the PMTE was going down the same path as the other entities.

She also decried the lack of consequence management for those officials implicated in the abuse of supply chain management (SCM) processes.

In programme 1 (Administration) of the DPWI, she failed to understand why the vacant posts had still not been filled. There seemed to be an inability to fail vacant posts, and this was against the country’s high unemployment rate. She also asked whether there had been a lack of will to attract more youths and disabled people to the Department. She took issue with the continued scapegoating of others, and the lack of accountability by the DPWI.

She also wanted to know what was being done to address poor compliance by contractors, as this impacted on South Africa’s economic recovery.

In programme 3, she cited poor information management and the month-to-month leases as a major problem. She was not happy with the inaccurate and incomplete information and the lack of reconciliation of statements. This meant that the real situation could not be determined.

In programme 6, she expressed her displeasure with the incomplete immovable asset register. Between 2011-2013, detailed verification of all immovable assets had been done, and again between 2014-2016, but since then nothing concrete had been done to update the register. Instead, Members had been told that this was as a result of the migration to a new system. Since she had been a Member of Parliament until the present, there had been no progress on the immovable asset register. She noted that without this register, it would be impossible to draw up new leases, conduct maintenance or even plan new projects, as no one knew what the State owned.

Referring to state funerals, she said that irregular expenditure continued to be a problem, but this had not yet been addressed. These porous SCM practices enabled malpractice that could have been avoided. 

She hailed the excellent work done by Agrément South Africa (ASA), and decried the lack of public awareness of the entity. She referred to several innovative hubs under the ASA that no one knew about, yet these hubs contained revolutionising technology.

Ms L Shabalala (ANC) said that the DPWI had a history of disclaimers, yet it seemed as if it was on the right path now. The Department should not disappoint, as they had come a long way in addressing their challenges. There had been a common trend with financial misstatements, and she hoped that the information and recommendations given by the AG would point the way forward. She admitted that she did not have enough information about the bidding process, but she had heard that all bids should be awarded within 56 days. She wanted to ascertain whether this was an ideal timeframe.

On the EPWP, she took issue with the targets achieved and hoped that there would be a marked increase in future.

On the Ocean Economy, she expressed her concern at the omission of coastal provinces such as the Eastern Cape and Kwazulu-Natal not being earmarked for an upgrade of their small harbours. The Eastern Cape was the poorest province in South Africa and could thus do with investments and upgrading of their harbours as “national harbours.” She failed to understand why the Western Cape was the only targeted province to have their small harbours upgraded to “national harbours.” In Kwazulu-Natal, no harbours had been proclaimed as “national harbours”, despite the province having invested heavily in this sector. She wanted to know why this province had also received nothing of the R600 million earmarked for this process. These interventions could lead to employment that could off-set or mitigate inflation.

She said the DPWI had to assist the government in job creation. She could see that the Department’s figures had not been aligned to fighting inflation.

She asked the DPWI to explain what expectations it had of Members regarding the condonation of funds.

Mr P van Staden (FF+) wanted to ascertain how many vacant posts still had to be filled, and by when this would be done. He also wanted a breakdown of the millions of Rands spent on state funerals. In a veiled swipe, he commented that he assumed that these funerals had taken place before the lockdown.

He expressed his exasperation at Parliament being petitioned to authorise the condonement of unauthorised expenditure of R61 million. He chastised the DPWI for running to Parliament to condone unauthorised expenditure.
 
He also lamented the inability of the DPWI to fully establish the worth of the property portfolio. This was a major concern. He wanted to know how this anomaly would be fixed, and by when. He recalled that he had sent a letter to Minister De Lille in October 2019 to ascertain whether the asset register had been updated. The Minister had subsequently replied that the asset register had on a regular basis been updated, in line with the guidelines, yet Members had heard a totally different story during the presentation.

He wanted to know how much had been spent on leases for the 2019-2020 financial year, and whether the much-vaunted cap on state funeral costs had been implemented. In the cases where it had not been implemented, he asked to be furnished with reasons as to why this had not been done.

He echoed the comments of his colleagues who had questioned the rationale of paying for goods and services before the actual work had been delivered. These companies had to meet their contractual obligations first before they could be paid. He also referred to the countless cases making their way through criminal justice system, where contractors had absconded with government funds. In most cases, the government had to wait for the conclusion of these cases before any money could be returned, while in the meantime these dodgy contractors would simply form new companies and bid for new projects. What had been done thus far to ensure that these companies/contractors were blacklisted?

He called on Minister De Lille to take accountability for the Beitbridge border fence fiasco, and wanted to ascertain what had been done to recoup taxpayers’ money. He was adamant that the millions wasted on this project should be recouped.

He asserted that the Disaster Management Act had been implemented haphazardly and abused. He referred to the lack of responsibility and accountability for what had transpired with the quarantine sites, and mentioned that the government had to be taken to court for these sites to be closed. He seemed to recall that Minister De Lille had indicated that she would launch an investigation into the double payments for these sites. He insisted that there should be further investigations launched to get to the bottom of this, as the matter could not just be swept aside.

With all these challenges within the DPWI, he failed to fathom why the DPWI still wanted to spend money on a new entity, Infrastructure South Africa (ISA). He cautioned the DPWI against the inception of this new entity. The DPWI and its entities faced serious problems, and something had to be done to stop the madness. People had to be held to account, including Minister De Lille as the political head. The corruption and other acts of malfeasance had to be stemmed.

He called on the DPWI to stop blaming Covid for everything, and said people should take responsibility for their actions.

Ms S van Schalkwyk (ANC) indicated that most of her concerns had been raised by other Members. She was, however, concerned about the RGS system, as Members had been promised an update on the finalisation of this system. She also wanted to know what impact the underspending on the compensation of employees and equipment had on the DPWI’s ability to deliver services.

On the DPWI’s inability to attract people with disabilities and youths -- apparently due to a lack of interest -- she recalled that Members had urged the Department to institute measures that would aid in reaching set targets. She requested information on what had been done, especially in light of the current unemployment crisis.

On human resources matters, she said that 20 officials had resigned from the DPWI. She asked why these officials had resigned, and whether exit interviews had been conducted. She expressed her dismay at the vacancy rate.

She referred to the clean audit received by the CBE, but lamented the unsatisfactory overall performance of the entity. She wanted to ascertain what plans had been put in place to address the lack of performance.

The Chairperson noted the success obtained with the conclusion of the Expropriation Bill. She did, however, take Minister De Lille to task for the DPWI’s inaction on amending the Public Works Bill. Minister De Lille was reminded that she had to drive transformation of the public works sector – the built environment and the rest -- and that she had promised that transformation would be addressed, yet nothing had been done. From 2014-2019, a lot had been said about transformation of the sector, yet it still lagged. She called on the Minister, as the political head of the DPWI, to drive this process.

She lamented the fact that the DPWI still had several key positions that had not been filled. Instead, the DPWI was awash with acting positions. She called on the Minister to fill these positions.

She also recalled that the AG had warned the DPWI that there had been continued non-compliance with key policies and government legislation, and that nothing had been done to prevent irregular expenditure. She called on the Minister to ensure that all relevant legislation that hampered transformation had to be amended, and the policy and research programme strengthened.

She also asked a question on behalf of Ms S Graham (DA), who had wanted to know whether the Special Investigating Unit (SIU) would be referred for investigation.

Mr W Thring (ACDP) largely agreed with most of the comments that had been made by his colleagues. He also chastised the DPWI for the irregular expenditure incurred in relation to the construction of new school buildings. This should not occur, regardless of how “virtuous” the projects were. He wanted to ascertain why irregular expenditure of almost R3 million had been entertained. He wondered why there had been no internal audit checks. He asked the DPWI to furnish him with the number of schools built and where these schools were situated.

He also lamented the dismal solvency and liquidity rate that the PMTE found itself in, as well as the fact that its liabilities had exceeded R9 billion. These were serious concerns -- the PMTE was going in the wrong direction.

He asked to be briefed on what steps had been taken to implement consequence management, if any, as there seemed to be a repeat of wrongdoing at the DPWI. He described the double payments at quarantine sites as scandalous, especially in light of the dire economic circumstances faced by millions of South Africans during the Covid pandemic. He asked for clarity, as these actions bordered on criminality.

He requested the Chairperson to schedule a meeting to discuss the woes around the asset register. This was a matter of extreme urgency, as it continued to be a concern for the Committee.

DPWI’s response

Minister De Lille expressed her gratitude to the AG for its guidance and help to the DPWI. She said that the AG had really gone the extra mile with the training that had been offered to all senior managers within the DPWI on the Audit Amendment Act. She agreed with Members that the DPWI had a history of poor performance, and that the remedial action contained in the 2018-2019 plan of action had not been implemented.

For the 2019-2020 financial year, the strategy had been changed to include consequence management, and this would be followed in the remedial plan that had to be implemented. She cited the case involving 13 senior managers that had been pending before the Labour Court as a serious impediment to appointing full time officials, hence the high rate of acting positions.

She said new key results indicators had been introduced for all senior managers, and Deputy Minister Noxolo Kiviet had worked on a new change management policy. The Minister stressed that if things did not change within her Department, than it would continuously obtain the same result.

She conceded that there had been weaknesses in contract management that had led to under-spending, poor performance and graft. She was confident that the new policies would yield good results.

On the outstanding legislative frameworks, especially the Public Works Bill, she was mindful that unless real changes were effected, the DPWI would continue to be dogged by the imposition of new policies as new ministers were appointed to lead the Department. She committed to furnishing the Committee with a report on the progress made.

She added that the DPWI had instituted due diligence on all SCM processes, and she would be happy to furnish Members with this list. She hoped that this would help.

On the overpayment of leases, the Minister made the claim that decisions taken by her seemed to be ignored. She informed Members that there was a certain committee that took decisions without her approval. She had since moved to clip the wings of this committee through the implementation of the new policy. She also decried the fact that it was lamentable that an overall performance rate of 60% had been achieved, against the 90% budget expenditure.

She said the DPWI would be signing service delivery agreements with set targets with the DPWI’s entities. These agreements would be aligned to the infrastructure plan. The DPWI had taken the time to brief the entities and the professional bodies in the built environment on the infrastructure plan, and had requested these stakeholders to furnish the DPWI with their inputs. The DPWI awaited these inputs.

The Minister expressed her exasperation at the lack of transformation in the built environment, and said that transformation in this sector occurred mainly in the lower grades. She had asked the profession to indicate to her how they intended to facilitate transformation in the higher grades as well.

She added that the time had come for the DPWI to conduct some introspection on the relevance of all its entities. This was based on the notion that several of these entities had overlapping mandates, and had been created by acts of Parliament.

She also conceded that policy and research development had to be improved. To assist the DPWI in this field, an external service provider had been procured to assist with the drafting of regulations for the Infrastructure Development Act (IDA), as well as other related legislation. Once again, she admitted that unknown officials within the DPWI had taken a decision that the DPWI should focus only on the IDA. She admitted that it was difficult to work with a Department that relied on convention, rather than targeted interventions.

On the procurement irregularities, she said that President Ramaphosa had directed the AG to conduct a live audit of all Covid-19 related procurement, and that she awaited the report. She vowed that there would consequence management for those implicated of wrongdoing. She had asked the acting DG to provide guidance on whether the Presidency should be approached on whether a proclamation should be sought for the Special Investigating Unit (SIU) to investigate.

Referring to the requests for condonation, she said the schools in question had been built between 2016 and 2018, and that the irregular expenditure recorded had been on the DPWI’s books since then. This had been the reason for the requests.

She concurred with Members that the immovable asset register should be a stand-alone item for a future discussion, and that she stood ready to provide a report on it.

One of the problems had been the DPWI’s reliance on contract workers for well over five now. She had received a request to approve another six-month extension of these contract workers’ contracts. She would furnish Members with a report on this as well.

Mr Mandla Sithole, Chief Financial Officer (CFO), DPWI, addressed the issue of procurement irregularities and overpayments at quarantine sites. He stressed that there had been a need to further engagement on this matter, and that his office had provided a report to the AG. He said that when people initially arrived from abroad, there had been a lack of planning, especially on matters like preferred diets. He explained that the double payments at the sites were reflected as a result of two or three family members being placed in separate rooms. He hoped that this explanation provided clarity.

He lamented the overpayment of about R42 million on leases, and vowed that consequence management would be implemented. He could not go into detail on the various cases. As per the guidelines, the DPWI would request officials to provide appropriate reasons as to why action should not be taken against them. After this assessment, labour relations would take over the process. 42 letters had been issued to officials, and that a decision had been taken that overpayments would not be tolerated.

Regarding the concern over prepayments, he replied that the Beitbridge border fence issue and state funerals were regarded as isolated incidences, and that it by no means meant that it occurred across the board.

He promised Members that he would furnish them with a list of schools that had been built, and said an amount of R261 million had been spent on their construction.

The immovable asset register was updated on a regular basis, and the only outstanding issue had been evaluations. The DPWI had various measures in place to record assets, and in most cases also relied on municipalities to verify assets. He conceded that it would be a very exercise to conduct verification of almost 90 000 facilities.

The DPWI was looking at measures to address the solvency and liquidity rate as well.

Ms Sasa Subban, DDG: Real Estate Investment Services, DPWI, said the asset register had been updated on a continuous basis, and a reconciliation process of the register took place on a yearly basis. The deeds register was also reviewed regularly, whereas the physical verification of assets took place every five years.

The assets had been valued at R123 billion, but the DPWI had received a disclaimer as it had undervalued some assets. This had constituted only about 2% of all assets. She also referred to the DPWI’s reliance on municipal evaluations and verifications.

She conceded that there were inherent challenges with the asset register, as some buildings had been built on land that did not belong to the State.

Mr Morris Mabinja, Senior Manager: Key Accounts Management, DPWI, said that specific cases related to the month-to-month leases had been referred to the SIU for investigation. The DPWI had also received an instruction from National Treasury not to engage with leases that were under investigation. He referred to the reconfiguration of government as a challenge, as certain departments had merged. The DPWI had been working closely with other departments on these month-to-month leases as well.

The refurbishment of the Telkom Towers was well under way, and would be occupied by the South African Police Service (SAPS). Once the building was operational, ten month-to-month leases would be terminated. These leases would not be able to be extended.

Mr Batho Mokhothu, DDG: Construction Management, DPWI, said that the DPWI had been faced with both macro and micro economic issues, and that there needed to be some appreciation of the challenges faced at the micro level, as these factors had been out of the DPWI’s control. The construction sector had seen a steady decline for years now, and in the main there had also been liquidity issues. Many contractors would commit to a project and as a result of the economic environment would have to halt work, as they did not have access to funds.

He had been working with the acting DG, and together they had identified the obvious financial implications as a result of construction delays. These had impacted on the financial statements of the DPWI. A short-term plan had been introduced that would look at the capacity issues, and there was a commitment to look at the value chain business improvement to unblock bottlenecks. The plan had been approved by the Executive Committee, and was in the implementation stage.

The Telkom Towers project was on track, and this would alleviate some of the concerns raised by Members. The project had been held ransom by labour disputes and the current Covid-19 pandemic.

Ms Carmen Abrahams, Chief Director: EPWP, DPWI, said she had engaged various stakeholders with the view to design key outcomes to attract more youths and people with disabilities. Coincidentally, the Community Youth Programme had done remarkably well. She said that most programmes had a large female component, but very little youth participation. The DPWI managed to attract youths to work on Covid-19 project and that it would be key for the Department to design more youth-orientated programmes.

Ms Florence Rabada, Acting Deputy Director-General: Property and Construction Industry Policy and Research, DPWI, noted the comments by the Minister and the Chairperson on the need to gain traction on the legislation. She said a policy review was currently under way to finalise all policy documents. The Expropriation Bill had been finalized, and the DPWI was also working on several other policy documents.

Mr Molatelo Mohwasa, Acting DDG: Inter-Governmental Coordination, DPWI, said that there had not been much related to the public entities, except to note the findings by the AG on the fruitless, wasteful and irregular expenditure by ASA and the CBE. The chief executive officers (CEOs) of these entities had been instructed to ensure that they developed an action plan to deal with these adverse findings, and the DPWI would be closely monitoring developments to ensure that these entities complied with the audit action plans.

He also touched on the errors with regard to financial misstatements, and said that these irregular expenditures amounted to astronomical amounts. This indicated that there was a need for built-in internal controls that included over- and under-payments.

On transformation, as reflected on by the Chairperson, he referred to the forums that had been established to address the lack of transformation. Meetings had taken place, but work had been stymied by the onset of the Covid-19 pandemic. He said the CBE would furnish him with a report on the outcomes of meetings that had been held with stakeholders in the built environment sector.

Ms Priscilla Mdlalose, CEO of the CBE, said she thought it important to explain the discrepancies between the actual performance versus expenditure. She found it unfortunate that she could not present the partially achieved targets. The CBE had reached about 95% of all the targets that had been set.

In programme 4 that dealt with regulations, work had been on the identification of work, and reports to this effect had been published. The CBE had also engaged with the Competition Commission (CC), and she thanked the Minister and Deputy Minister for having facilitated the engagement with the CC. This was an important milestone.

The CBE had also developed a knowledge management platform, and it only required public participation. For information communication technology (ICT) governance, the CBE had formed an internal ICT steering committee with the support of the DPWI’s ICT experts to strengthen this field.

Mr Cyril Gamede, CEO of the CIDB, admitted the challenges experienced with the filling of vacancies, especially at the executive and senior levels. He wanted to assure the Chairperson that the CIDB had agreed on a way forward. Two of the five executive positions should still be filled, and four of 12 senior level positions would also be filled by the end of the first quarter in 2021.

He acknowledged the slow pace of transformation, and confirmed that the bulk of transformation had occurred in lower grades. The CIDB had engaged contractors to devise plans that ensured that targets were met. He cited the lack of access to work as one of the biggest impediments to transformation. The CIDB had engaged departments and other stakeholders on the need to prioritise previously disadvantaged contractors. He also cited challenges related to the payment of invoices by government departments. This impacted heavily on contractors.

Mr Clive Mtshisa, DDG: Corporate Services, DPWI, explained that 262 positions had already been advertised, and that these positions straddled all levels. To date there were also 244 positions that had still not been advertised. About eight senior managerial positions should still be advertised. The selection process of 13 directors had been concluded, as well as seven chief director positions. Some DDG positions had been combined, but would be uncoupled.
 
Mr Nkosana Kubeka, Chief Director, Property Management Operation, PMTE responded to the questions posed by Ms Shabalala that pertained to the Ocean Economy and small harbours. He said that over and above the 12 proclaimed harbours in the Western Cape, cognisance had to be taken of the special nodal development areas as well. In the Northern Cape, three harbours had been identified, in the Eastern Cape five, as well as five in Kwazulu-Natal. Port Nolloth in the Northern Cape, Port St John in the Eastern Cape and Port Edward in Kwazulu-Natal, had all been identified as part of the phased approach.

He added that in the Eastern Cape, a feasibility study had been done on the economic viability of Port St Johns as part of the special economic development framework. This work had been conducted in tandem with other sister departments. The feasibility study was at an advance stage. On 4 November, the DPWI had met with potential multilateral investors, who had all expressed interest in the project.

In phase 2 and 3 of the initiative, the DPWI would focus on the other two provinces. He promised Members a detailed presentation on all of these.

Mr Fazel added that on the quarantine sites, a follow-up had been done and no irregularities had been found. The DPWI would conduct additional follow-ups, in tandem with the AG.

With regard to state funerals, the DPWI, in tandem with the Presidency and the Department of Defence (DoD), was in the process of developing norms and standards. A cap on each state funeral had also formed part of these discussions.

On the Beitbridge issue, he said that 13 disciplinary procedures had been instituted, and the SIU was busy with a legal process to recoup the money from the contractor.

On the blacklisting of companies, he said that the DPWI had created a special committee to investigate this matter, and it would have to ensure that the committee was well capacitated.

On consequence management, he said that to date 20 warnings had been issued. These covered various offences, from the serious to the mundane.

The DPWI was in the process of developing a clean audit action plan with the help of the AG, and he hoped that next year would paint a different picture.

On change management, he commented that the Deputy Minister had led process that sought to address inherent challenges. The DPWI had undertaken a diagnostic review of morale within the DPWI, and this diagnostic review would provide guidance.

Minister De Lille said that the Committee should give her and her team six months to address all the pertinent challenges within the Department.

The Chairperson thanked the Minister and her team for the concise briefing, which had shown the weaknesses within the Department, especially the PMTE.

She called on the Minister and her team to work towards the improvement of the audit outcomes. There were many issues that had been raised that required more information. She also touched on the issue of Telkom Towers, and asked that this project be completed as a matter of urgency.

The meeting was adjourned.