The Department of Public Works and Infrastructure (DPWI) and the Property Management Trading Entity (PMTE) briefed the Committee on its quarter three performance report for the 2020/2021 financial year. The meeting took place on a virtual platform. The Chairperson noted the underperformance of the Department and told it that it was expected to function optimally even during the pandemic. The Minister said that it was not feasible for the Department to use the lockdown as an excuse for underperformance.
The Department had overall performance of 23% in quarter one, 33% in quarter two and 25% in quarter three. The Department was however also able to achieve partially and fully some of its quarter three targets. Total expenditure as at the end of December 2020 is R5.6 billion and equivalent to 72% of the total adjusted budget allocation of R7.7 billion. The variance between expenditure and the drawings amount to R945 million. The presentation indicated that all the PMTE programs did not exhaust their full budget allocation: the highest budget consumption being at 69% and the lowest budget consumption being at 13%.
The Committee was concerned about the high vacancy rate of managerial positions in the Department as well as Infrastructure South Africa (ISA). When will these posts be filled? It was worry was that non-compliance with the Public Finance Management Act (PFMA) and the lack of technical capacity to fill these vacancies would lead to fiscal dumping and a bad audit outcome.
The Committee also said that the temporary employment of the acting posts would render instability in the Department as no one can be formally held accountable. It thus noted that it was difficult to operate and function in an under-staffed Department. A few Members contested the Department’s slogan and said that it could be problematic. Members did not understand why there was high budget expenditure but an overall low and poor performance.
Members were also disappointed by the approximate 300 000 job opportunities that the Expanded Public Works Programme (EPWP) failed to create and wanted to know what its plans were to make up for this huge loss. Members requested detailed reports of the completed construction projects, and information on the allocation of and geographical location of the distributed land parcels. The Committee noted the struggles encountered by the Department with other client departments and wanted to know what was being done to resolve it; and whether there were plans in place if the client departments failed to meet obligations and financial payments.
Opening Remarks by the Chairperson
The Chairperson welcomed all Members of the Portfolio Committee, the Minister and Deputy Minister (ministry), and the Acting Director-General (ADG) of the Department of Public Works and Infrastructure (DPWI). She said that the purpose of the day’s meeting was for the Committee to review the DPWI quarter three performance report as oversight for the annual report and the Budgetary Review and Recommendation Report (BRRR). The Committee noticed that the Department underperformed during the lockdown. The Chairperson said that the Department was expected to continue to function effectively amidst the pandemic. She said that the Committee was very concerned about the vacancies in the senior managerial positions and the lapsed contracts. She advised that these issues were to be addressed quickly, as it would negatively affect the outcome of the annual audit. There were two apologies.
The Minister’s Remarks
Ms Patricia de Lille, Minister of Public Works and Infrastructure, said that the Department would address the issue of the filling of vacancies in the presentation. She agreed with the Chairperson and said that the excuse of underperformance due to the lockdown was unacceptable as infrastructure could operate since lockdown level four. She said that the pandemic was the new normal and the Department should thus adjust accordingly. She said that she would ask Mr Imtiaz Fazel, Acting Director General: Department of Public Works and Infrastructure, after the presentation to brief the Committee on the actions the Department has taken to deal with the perpetual excuse of underperformance due to the lockdown.
DPWI Quarter Three Report 2020/21
Mr Fazel and his team presented the DPWI quarter three report for 2020/2021. He told the Committee that the presentation would be divided into two: Part A, the non-financial information and Part B, the financial information.
Mr Kanyane Sekgala, DPWI, briefed the Committee on the Department’s performance and indicated that there was overall performance of 23% in quarter one, to 33% in quarter two and down 25% in quarter three.
[see presentation attached for a detailed breakdown of targets achieved in the quarter per programme]
Mr Aaron Mazibuko, Chief Director: Finance, DPWI, presented the financial information. He first presented the adjusted budget allocation per programme and expenditure per economic classification. Total expenditure as at the end of December 2020 is R5.6 billion and equivalent to 72% of the total adjusted budget allocation of R7.7 billion. The variance between expenditure and the drawings amount to R945 million
Mr Mandla Sithole, Chief Financial Officer, DPWI, presented the Property Management Trading Entity (PMTE) expenditure summary report.
[See presentation for further details on PMTE performance]
The Chairperson thanked the Department for the presentation and opened the floor for questions.
Mr E Mathebula (ANC) worried about the high senior managerial vacancy rate, especially the ADG post. What is the progress of the court proceedings between the Department and the suspended Director- General (DG)? Is there any disciplinary process in place? Mr Mathebula was of the view that parallel to the court proceedings; the Department could have its own investigation and find the suspended DG guilty or not guilty. He requested that the Department continually provide the Committee with information on litigations for and against them. What are these litigations for and how much does it cost? He was also disturbed by the consistency of poor performance throughout all three Quarters. He said that the Committee needed tangible answers for this underperformance, as the lockdown cannot be used as an excuse. Lastly, he commended the ADG for mitigating a Consequence Management Process (CMP) to deal with the misrepresentation of performance without a Portfolio of Evidence (PoE). Were there any cases of these, and was anyone found guilty?
Ms A Siwisa (EFF) said that it was unfortunate that the Department was pinning its underperformance on the lockdown. The two underlying issues were that there is a lack of leadership and monitoring and evaluation systems in place. If the Department does not resolve this, then the problems will persist. She warned that the non-compliance with the Public Finance Management Act (PFMA) and the vacancies would greatly cost the Department. She also said that if the Department continued to appoint acting positions, then it would be difficult to hold a person accountable for their actions. As such, these positions need to be filled urgently.
On slide 19 of the presentation, she noticed that the number of IA was 18 475 but only 3 695 got moved and the delay was due to non-renewal of staff contracts. How does the Department expect to function if there is a shortage of staff and vacant positions? Slide 13/14 of the presentation indicated that there were six completed construction projects in the period, however, the budget was allocated for eight projects. Which two projects were not completed within the stated period? Ms Siwisa further asked that the Department also provide the Committee with a list of these completed projects. The number of infrastructure sites handed over for construction had a target of 63 but only 27 were handed over due to slow uptake in construction, followed by lockdown. The target number of infrastructure projects was 66 and only 8 were completed. The intervention and corrective measures were to monitor the performance indicators monthly. During this period, why was there no monitoring put in place? She advised that the report must include information on the progress of the intervention and corrective measures put in place. She also requested a detailed report of the presentation, as she sought more information on how the Department intervened with the Frances Baard District Municipality.
Ms Siwisa contested the Department’s slogan “South Africa works if Public Works works”- As she felt that it was thus implying that our country is at a standstill because of the Department’s underperformance.
Ms S Graham (DA) said that slide nine of the presentation spoke of a Community Works Programme (CWP) under the EPWP. Are we claiming these work opportunities under the Department, or is this another project with the same name? Slide 11 of the presentation indicated that there should have been two policies implemented but only one was- Which policy was this? She also asked for clarity on the Custodian Asset Management Plan (C-AMP) that was referred to in slide 12 of the presentation. Ms Graham agreed with Ms Siwisa on the infrastructure projects issue. Are the failures of the client Departments contributing to your inability to complete the construction projects? There were four out of 80 structural critical components achieved in Quarter three. What will happen to the other 76 components? Are there any contingencies in place if you fail to meet these obligations? Will the Department be held accountable for its failure to address these issues?
Slide 29 of the presentation spoke of Infrastructure Development Coordination and there was a R83 million adjustment made from the initial R60.8 million. When was this adjustment made? The payment was made to the Industrial Development Cooperation (IDC) which falls under the Presidential Infrastructure Coordinating Commission (PICC) Unit. What is the IDC, and how does it fit into Infrastructure South Africa (ISA)? Slide 31 of the presentation showed an adjustment of R158 million which was unavoidable under Property and Construction Industry Policy and Research which was for the Presidential Youth Employment Intervention (PYEI). Is there a plan for the PYEI program, and how is this money being spent? Slide 35 of the presentation spoke of Covid-19 interventions. What were these Covid-19 interventions and why is there such a huge underspend on these interventions? She asked why the payment rate on municipal services was so high. Do the payments made to the municipal services also include interest on late payments?
Slide 38 of the presentation indicated that there was an underspend of R1.2 billion under refurbishments. Will this money be rolled over? What has not been done and how will it affect the Department going forward? There was also an underspend of R1.1 billion on Client Capital. How does this translate into the jobs that could have been created if this money were spent? She urged the Department to be mindful that underspending on Infrastructure and Construction projects has a huge impact on job creation. She also noticed a decrease in revenue of Land by R10.7 million and there is a zero allocation for this year- Why has this happened?
She said that the ADG spoke of CMP which is good. How do you implement a CMP with an under-resourced Department that has many vacancies in the senior managerial positions? Ms Graham contested the EPWP Non-Profit Organisation (NPO) sector issue and said that there was a five-year contract with the Independent Development Trust (IDT) Board. It is thus unacceptable to say that there was a delay with the Memorandum of Understanding (MOU), as it should have been signed in March 2020. Ms Graham was very unsettled by the approximate R1 billion variances between the budget expenditure and drawings figures. It was too big of gap and affects the Department’s ability to deliver services. She said that the PMTE projected R2.7 billion underspend. This is unacceptable because PMTE is the core business of the Department. Why is there a four percent variance between the two financial years because there was no lockdown in 2019? Lastly, the EPWP has not had a Deputy Director-General (DDG) since the former retired in January 2020. Is there a DDG now, because the Inter-Governmental Relations (IGR) unit is failing with its interactions amongst client departments?
Ms M Hicklin (DA) said that she noticed that not only was the Department using the lockdown as an excuse to hide its underperformance, but most of the board as well. Her greatest concern was that there were approximately 300 000 EPWP job opportunities which were not created. There was also land parcels allocated under the REIRS programme. She told the Department that for proper oversight, it was important to provide the Committee with the geographical locations of these land parcels. Where are the parcels of land? Who was it allocated to and for what purpose? Who determines who will get land and which land is allocated? She said that the CPM was one of the biggest employment generators in the country and that it was very disappointing to see how little the uptake was. Ms Hicklin said that the lack of technical capacity to fill the vacancies would be the Department’s downfall and potentially lead to fiscal dumping at the end of the financial year. She was also very concerned about the transfer and subsidies expenditure of the EPWP. EPWP has underspent on 300 000 jobs and yet 75% of the budget has been spent and Covid-19 interventions used 69% of its budget. What were these interventions? What measures are in place to ensure that client departments meet their obligations? How will you ensure that the Department is not affected if client departments do not meet their obligations?
Ms S Van Schalkwyk (ANC) said that ISA should be operationalised very soon. What is the timeframe in ensuring this? What progress has been made in filling the ISA vacancies? She welcomed the transfer of land and asked for the exact geographical location of these land parcels. She noticed a decrease in the expenditure of consultants and outsourcing of services. Is this because of the lockdown and insourcing? Like the Minister, she drew a comparison of the Department’s budget expenditure versus its underperformance. There was a 72% financial performance expenditure versus a 25% quarter three overall performance. What is being done to remedy this situation? Can you indicate what will be done to ensure that there is no high unemployment and fiscal dumping at the end of the financial year?
Ms Siwisa asked whether the land parcels were given to the Minister of Human Settlements and requested for the geographical locations of these land parcels. She asked whether the target for persons with disabilities was only two percent as seen in the presentation.
Mr T Mashele (ANC) said that he knew that the lockdown would be used as an excuse for underperformance. He requested the Department to provide the Committee with a comparative analysis of its performance in 2019 versus 2020. He said that the Committee cannot expect the Department to achieve any results because it does not have enough human capacity to deliver services due to the high vacancy rate. Based on the Department’s slogan, Mr Mashele asked the Minister whether it understood the impact of the failure of the Department to deliver services to the people. In frustration, he said that the Department did not provide enough jobs and failed to exhaust its budget even after budget cuts. Does the Department understand the impact of failing to deliver jobs through the EPWP for youth empowerment? He acknowledged that the Department achieved the target of employing women but asked why it failed to employ young people. He requested that the Department should be given a period (like three months) to use the existing budgets to fill the vacancies. If this is done, then there will be no excuse for underperformance. He said that the Department kept projecting what is wanted to do, and not what it is doing now or have already done. The Department should thus present its structural and systematic challenges so that they are addressed. He also asked for the list of land parcels given to know the geographical locations and purpose of utilisation.
The Chairperson said that Dr Zweli Mkhize, Minister of Health, recently announced that the country should expect a possible third wave of Covid-19. What are the implications for the Department in having to reprioritise funds over quarter three, should this happen? There has been shifting of funds such as the R343 million transferred to the Department of Public Enterprise for the South African Airways (SAA) rescue plan; and the R18.4 million transferred to the National School of Government. Does this shifting of funds have an impact on the operation of the Department and the PMTE?
Minister de Lille thanked the Committee for its inputs. She responded to Mr Mathebula and said that suspended DG, Adv Sam Vukela, referred the dispute to the bargaining council who then said that it had the jurisdiction to determine the disciplinary matter. The legal team of the Department objected this finding and was instructed by the late Minister Jackson Mthembu, to review this ruling in the labour court, and this is where ruling is. She said that the Department would provide the Committee a report of this at a later stage.
She said that the reason why the IDC appeared in the report was because Mr Ebrahim Patel, Minister of Economic Development (ED), transferred funds from the ED Department to IDC for them to establish the PICC technical task team. In August 2019, PICC was transferred to DPWI.
She said that Mr Clive Mtshisa, Acting Deputy Director General: Corporate Services, would give the Committee a full report on the issue of advertising and filling the senior managerial ISA and Department vacancies.
She said that information on the land parcels would be given to the Committee in the next meeting. Some of the land parcels are for Land Restitution and some are for Land Redistribution to the Human Settlements Department (HSD).
In October 2020, the amount of money that should have been transferred to the IDT was only transferred in January 2021. Minister de Lille said that she asked for a full report on this, given that the Ministry is now in full collaboration with the NPO sector.
She agreed that the Department used the pandemic to cover up its underperformance and said that the Ministry confronted the Department about this issue since 2020.
Mr Fazel said that Ms Sasa Subban, Deputy Director-General: Real Estate Investment Services, DPWI, would address the district resolutions for the challenges faced with client Departments under the User Demand Management (UDM) section. Mr Adam Mthombeni, Acting Deputy Director-General: IGR, DPWI, added that IGR deals with the relationships amongst client Departments and collaborates to ensure that these resolutions are in place. He said that the IGR was more inclined to Provincial and Local Government coordination. He told Ms Siwisa that through the District Development Model (DDM), the Department would ensure that the districts are supported in resolving horizontal and vertical cycle issues; maximise impact and align plans and resources; build government capacities to support municipalities; and narrow the gap between the people and the government.
Mr Batho Mokhothu, Deputy Director-General: CPM, DPWI, agreed with the Committee that the construction branch plays a major role in job creation and economic development. He said that there have been active discussions on how to improve business processes for the effective delivery of infrastructure. He said that the Annual Performance Plan (APP) is largely driven and includes set targets and achieved targets for projects created. Although it was not reflected in the desired outputs, he said that there were some jobs created as there are people working on the construction sites. He said that there were approximately 700 projects sitting in design stage which are being converted into construction projects. He also said that the Department was looking at approximately 3 000 projects in total, from planning to design and construction. He said that the CPM unit has started to work on a weekly basis to resolve some key performance issues. He said that there was an improvement in the budget expenditure trend, but because of a slow start of the financial year, it was not able to cover production for the lost time. He admitted that the production level was lower in quarter one and that the Department was suffering from the impact of it. He said that there were weekly meetings with EPWP colleagues to maximise on job creation and reported that there were 297 EPWP projects that have been put in place as an intervention. He said that he would submit a list of completed projects to the Committee.
Ms Carmen-Joy Abrahams, Acting Deputy Director-General: EPWP, DPWI, responded to Ms Graham, saying that the CWP was part of EPWP since inception. CWP is the largest programme out of the 24 EPWP programmes and takes up 26% of the EPWP. The funding sources vary and not all the funds received in the books are for Public Works. The Division of Revenue Act (DORA) Transferring Officer is for the purpose of the EPWP, and Public Bodies (PB) should utilise their own baseline allocations. The Department of Cooperative Governance and Traditional Affairs (CoGTA) receives its budget for the CWP. She said that PW has been working with Mr Mashwahle Diphofa, DG: DCoGTA, to address the challenges encountered. She said that PW received a report that DCoGTA would soon reach 100% of the participants’ onsite. Therefore, in response to Ms Hicklin about the 300 000 jobs not created; the CWP will largely contribute. Other programmes in the social sector also had a 94% performance because most of the programs taken related to the Covid-19 interventions. She said that they were expecting the performance of the EPWP to pick up because CWP is now on track.
EPWP is the dispersing office for the EPWP incentive grant however some departments directly receive their own grants like CWP and Provincial Roads Programme (PRP) etc. She said that this should explain the disjunction in the alignment of the budget and performance because the CWP receives its own funding (which is not in the PW financial books).
She told Ms Hicklin that the DRA stipulates that three-tranche payments are made to the provincial, and municipal sphere. Therefore, PW needs to provide monthly expenditure reports based on the expenditure provided by PB. She said that PB must adhere to the expenditure and reporting requirements of the EPWP. She said that the Department found that provinces performed well in this financial year, and that municipalities always tend to be a challenge due to capacity issues.
She said that EPWP is focused on youth empowerment and that its challenge was working with big programmes like the PRP. These programmes mainly target women and are rural-based; therefore, the job opportunities depend on the portfolio of projects available. This financial year, through NPO funding, EPWP changed the NPO programme through Covid-19 interventions and 90% of the participants were young people. She told Ms Graham that there were indeed some challenges and that some of the delays were because of the demands made by the NPOs which had to first be cleared out with the Chief Procurement Officer (CPO). Now, a new NPO programme has been adapted and there are 312 NPOs working with 38 000 workers onsite. She also said that the EPWP NPO programme had a functioning reporting system; a Covid-19 Special Report; and a signed annual addendum for December 2020.
She said that PW was aware of the five-year contract agreement and was seeking legal advice on how to ensure a smooth adoption of a programme in 2021/2022.
Mr Mtshisa assured the Committee that there was a lot of work the Department was doing. He told it that the November 2020 report showed expenditure spending at 49% which moved to 71% in January 2021, and 73% for PMTE.
The total staff establishment of the Department is 6 557; PMTE has 4918 employees; and the main vote has 1 639 employees which includes interns, skills development, and the PYEI.
He said that there were five key vacancies at the senior managerial positions, two of which were being processed for shortlisting by the Ministry and ADG. These two positions are for the IGR and Supply Chain Management (SCM) managerial positions. The three remaining positions for Facilities Management; EPWP; and Policy Management have been advertised and applicants will be shortlisted after data capturing. He said that this process would be finalised in a short space of time if all goes well.
He said that the Minister would have concluded the process of appointing the Head of ISA, but the delay was because of the two candidates. One applicant did not have a matric certificate copy and the other candidate had an international qualification which is awaiting verification. Once this has been done, the Department will be able to process the appointment. He said that Dr Kgosientsho Ramokgopa, Acting Head: ISA, has scheduled shortlisting for the five Chief Director (CD) positions for ISA. Mr Mthisa said that the recruitment plan is closely monitored by himself, the Ministry, and the Audit Committee (AC). He however said that the panel was driven by underperformance because the panel chairperson and the other members came from different branches and that the response rate was low, but this is being managed.
The pre-set national norm vacancy rate is 10%. Mr Mtshisa said that over the past three-five years, PW has achieved approximately 24-25% of the vacancy rate which has been reducing steadily since 2017. In Quarter Three, PW was able to perform better and beat the target of 12% by 11%.
Mr Mtshisa told the Committee that the difficulties with the Department’s capacity had nothing to do with its constraints in the budget, but rather the gaps in the structure. He said that there was therefore a need to provide efficient capacity on the Facilities Management of the Department.
He responded to Mr Mathebula and said that the Department would submit a full report of the litigation cases. He said that there were 280 cases to date and that R2.5 million was spent. He also said that it was processing invoices which amounted to R4 million. These invoices are because of the interventions council sought like the Expropriation Bill and the funeral service report where five officials have been charged etc. He said that these cases would have an impact on the Department’s legal bills.
Mr Fazel said that it was important to have the DDG positions filled to create stability in the management of the Department. He said that Mr Mtshisa and himself were ensuring that these positions were being filled and that there are acting posts in the interim.
Mr Mzwandile Sazona, Chief Director: Prestige Policy, DPWI, responded to Ms Graham and said that the policy that was approved is called the Standard Infrastructure and Customs for state official and special official funerals. He explained that a state funeral was reserved only for the President, an official funeral reserved for the ministry and other political officials, and the special official funeral reserved for distinguished persons from either category one or two.
Mr Sithole said clarified that the process was that the municipality would have to first invoice the Department before it could pay. He agreed that the municipal services were too high and explained that it was because when the Department was revising the budget, it assumed that the budget would be low because most people were working from home. He said the Department was also charged interest because it would sometimes pay the municipalities late, but mainly because the municipalities did not invoice them on time and would later claim it. This issue has however been resolved. As such, the Department has intensified engagement with the municipalities, and this can be seen in the spending pattern which increased from 79% in the previous financial year to 94%.
He said that there will be roll-over of the unspent amounts on capital because once the Department appoints a service provider, the unspent expenditure amount is rolled over.
He agreed that the variance between the budget expenditure and the drawings was too big. He explained that the financial drawings are viewed by National Treasury in the beginning of the financial year, and that any adjustments made in between will only be considered in September/ October when the Minister of Finance concludes on these adjustments. Therefore, there was a lot of money in the Department’s financial books by the end of December 2020, as treasury only considered the revised adjustments in January 2021. He hoped that this explanation justified the R1 billion variance.
He said that he understood the Committee’s concerns of spending but underperforming. He argued that spending and underperformance cannot always be linked. He said that the Department has expenses such as the municipal service account and lease agreements of approximately R5 billion. As such, the Departments’ spending may appear to be high whilst it is adhering to its monthly commitments.
He told the Chairperson that the shifting of funds affected the Department by stopping the performance of certain programs. The Department engaged with different branches (like helping SAA) when the lockdown began because treasury required a lot of money. He said that the shifting of funds however happened in consultation with all the other branches.
Ms Subban told Ms Graham that the Department used two documents from the Government Immovable Asset Management Act (GIAMA) for its planning tools. One document is the C-AMP, and the other is the User Asset Management Plan (UAMP). She said that the Department developed the C-AMP using the UAMP. GIAMA stipulates that every user Department must submit an annual UAMP that indicates how a user is utilising the properties, how they are functioning in their properties and their strategic accommodation requirements for the next five years. From this, a user portfolio is developed, however, Ms Subban pointed out that some user Departments do not submit their UAMPs. She said that this issue was now being addressed through the DG-to-DG offices and meetings. She said that C-AMP also links to the properties the Department has and how they plan to utilise them.
She said that the Minister highlighted that the Land Reform Program (LRP) constituted of Land Redistribution, Land Restitution and Human Settlements. She said that the Department distributed over 125 land parcels which constituted to over 25 000 hectors of land. She said that she would provide the Committee with a report on this information, as well as the geographical location of the land parcels, and a list of the processed Human settlement projects.
She said that when land was released for Human Settlements, it was aligned to the Priority Housing Development Areas (PHDA) of Human Settlements. Human Settlements would then identify the land parcels and the Department would check if it requires development plans and the alignment of the Integrated Development Plans (IDP) for the municipalities. She said that for Land Restitution, the Department of Agriculture, Rural Development and Land Reform (DARDLR) determined who got the land parcels. She said that there was a list of approved qualifying beneficiaries and those waiting approval. Once the beneficiaries were approved, and the land belonged to the DPWI; the Department would process these beneficiaries through a checks and balance system and then transfer (via Ministerial approval) the land parcels to the DARDLR. The DARDLR would thereafter issue title deeds and undertake the conveyancing processes. She said that the process worked the same for land redistribution (agriculture and tenure reform). She also said that the Minister encouraged the DPWI to work closely with the DARDLR to identify additional areas that can support beneficiary programmes. She reported that there were ten processed Human Settlements projects with Ministerial approval; and that the Department had to update its evaluations and needed National Treasury endorsement.
Ms Subban said that the UDM section engages with client departments and that the dispute resolution was inefficient for the disputed payments of invoices etc. She said that this issue was later enhanced by CFO meetings, DG-to- DG meetings and DG-to-DG letters to resolve the issue. Lastly, she requested for a two-hour presentation in the next meeting to present the progress of the Immovable Asset Register (IAR) and the challenges experienced.
Mr Nkosana Kubeka, Chief Director: Property Management Operations, DPWI, said that the Department plans to put a preventative maintenance strategy in place which would require a proper assessment of the critical components and facilities. He said that the new approach adopted was to move away from the day-to-day maintenance and move towards preventative maintenance measures.
Mr Fazel said that the Department received R158 million to create 1 560 jobs for March 2021 and exceeded the target. The Department exceeded the target because it utilised the extra funds from the project, as it commenced a month late. Ms Lydia Bici, Deputy Director-General (DDG): Professional Services, DPWI, advised him that the programme was soon reaching 100% budget expenditure.
He said that more than 90% of the Department’s procurement was in favor of designated groups but does not reach the target of persons with disabilities due to the nature of companies that procure.
Ms Eulala Kruger, DPWI, restated that the Department met the designated groups target by 100% and that its target fell short for persons with disabilities. She said that the Department was looking for ways to intervene and achieve these targets in the future.
Mr Fazel said that quarter three was an important period for the Department to deal with underperformance. He said that the Department has dealt with seven underperforming branches, five of which have provided explanations and late disclosures, and the remaining two branches have requested an extension of time. He said that this information would be processed in detail to hold management accountable for underperformance.
He stated that the Auditor-General (AG) regularly fines core business functions like Construction and Facilities Management, for reporting performance that cannot be substantiated with a PoE. He said that there had been a lot of misrepresentation in the Department and hoped that the AG would take serious action. He added that EPWP had similar challenges with PB who reported that it created job opportunities whilst it did not. He said that the Department had between 28-30 senior officials facing disciplinary hearings and proceedings. It has created instability in the Department and needs to be finalised soon. He said that the Department was also waiting for the Labour court to reverse the misconduct and irregular appointments of 12 appointees to various senior managerial positions.
He reported that he engaged with the Ministry regarding the underperformance and introspection of the Department. He said that the Department engaged with senior management, the AC, and Ministry in the past month and developed a ten-point plan to address the structural and organisational failures. The interventions included the following: implementing an ethical transformation programme; to develop a service delivery improvement program; value chain and business process management; and the implementation of Infrastructure Delivery Management System (IDMS); to fast-track the Enterprise Resource Planning (ERP) System; move to a metro-business and delivery model system; introduce an ethics and compliance infrastructure system; introduce a contract management and monitoring capability; organisational wide skills assessment to determine the skills mix and interventions required to optimise service delivery and organisational planning; and lastly, to have a clean audit for the financial year.
Ms Noxolo Kiviet, Deputy Minister of Public Works and Infrastructure, appreciated the tone from the Committee, as it reaffirmed everything the Ministry warned the Department of. She said that the underperformance not only affected DPWI but all branches across the board as well. She told the Committee that the Department’s performance would improve, as there was now an Inter-ministerial Committee (IC) Chaired by the Deputy President, Mr David Mabuza.
She said that the Department was driving a change management programme, coupled with an increased number of Consequence Management incidents.
Deputy Minister Kiviet said that there was a correlation between the lockdown and poor performance of monitoring due to the restrictions of travelling. She said that now that the country was under lockdown level one, the Department continues to do its best in physically monitoring. For instance, the Ministry will be going to KZN for the next two days as part of monitoring.
She said that the Department decided to limit contracts and consultancy in DPWI because contract employees lose out on the job benefits- as their contracts are initially short term before extension. She argued that there was a need to permanently employ the staff to maintain the structure of the Department. She said that DPWI was working towards organisational stability and the capacity to perform; and thus, the drive to make Public Works the true Public Works that makes South Africa work.
She said that the misrepresentation of performance without a PoE is a misconduct and must be dealt with accordingly.
She restated that Ms Subban would provide the Committee with the report on the land parcels.
Ms Hicklin thanked the Department for the progress of the report presented. She was worried about the despair she noticed in the officials who presented and encouraged the Department management to address it as it creates an unproductive working environment.
The Chairperson appreciated the responses from the Department. She said that the closing remarks by Mr Fazel showed that there were serious challenges in the Department. She said that if there were still acting positions in DPWI, then there would be no stability.
She reminded the Department that DPWI plays a key role in assisting service delivery across all Departments in the country and therefore finalisation of the Public Works Act (PWA) becomes crucial. The PWA will assist the Department with its payment disputes with client Departments.
She said that the Committee was happy to note that the Department developed a ten-point intervention plan for strong organisational and business coordination. She hoped that the IAR would be better maintained going forward and that the Department will deal with tit contract management. She was also pleased to hear that the Ministry was headed to KZN for monitoring.
She hoped that the inputs made by the Committee were well received by the Department as there were many honest and valid points raised. She said that the Committee was now expecting better performance for Quarter Four.
She said that the Committee would appreciate a clear report on the land parcels issue, even before the next meeting.
She said that the Committee looks forward to one day being proud of having played an oversight role to DPWI achieving a clean audit.
The Committee adopted its minutes from a previous meeting.
The meeting was adjourned.
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