DPWI and PMTE Audit Action Plan; with Deputy Minister

Public Works and Infrastructure

15 March 2023
Chairperson: Ms N Ntobongwana (ANC)
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Meeting Summary


The Department of Public Works and Infrastructure (DPWI) reported that the Property Management Trading Entity (PMTE) received a disclaimer audit opinion from the Auditor-General South Africa (AGSA) for the past financial year, with risk areas being leases, municipal services, accruals, and Property Plant and Equipment (PPE). Consequence management plans were implemented and set to reduce risks, possibly achieving a good report from the AGSA. This was reported as the Department presented its audit action plans to the Committee.

The Department trusted that with the new Minister, Deputy Minister and hiring skilled people to be a part of its team, it would improve performance and make an impact with the time it left in the Sixth Administration.

The Committee was not pleased with the incompetency of the Department with the day-to-day maintenance of its properties; and asked questions about the way heritage sites were treated, noting they were not treated with pride. Members asked about how the state buildings could be abandoned into the hands of criminals.

Members said it was very concerning to see some state properties under the ownership of private individuals, with transfers done illegally. Members also asked about buildings being utilised by the police and the military and noted it was not in good condition, sick bays required payment before giving healthcare access to those who needed it, and there was a huge record of non-compliance with the policies.

The Committee said the Department must put more effort into maintaining the property of the state and take its job seriously.

Meeting report

There were apologies from the Minister of Public Works and Infrastructure, Sihle Zikalala and Mr P van Staden (FF+).

The Chairperson asked the Committee Members to welcome the new Minister and Deputy Minister. She informed the Ministry that each party on the Committee was represented as follows:

Ms Lindiwe Mjobo represented the ANC.

Ms Samantha Graham represented the DA.

Ms Mathapelo Siwisa represented the EFF.

Deputy Minister of Public Works and Infrastructure, Ms Bernice Swarts, thanked the Committee for a warm welcome and said she is looking forward to working with the Committee. She and the Minister will get up to speed on what needs to be done on deliverables in the Department. 

Audit Action Plans Briefing 

Mr Mandla Sithole, Chief Financial Officer (CFO), Department of Public Works and Infrastructure (DPWI), and Mr Siboniso Sokhela, Acting Chief Director, DPWI, took Members through the presentation. 

In the 2021/2022 financial year, the Property Management Trading Entity (PMTE) regressed from a qualified opinion to a disclaimer of opinion. The Annual Financial Statements (AFS) disclaimed items were Property Plant and Equipment (PPE), and payables from exchanged transactions such as accrued leases, municipal services, and accruals. 

DPWI maintained an unqualified audit opinion with findings on performance information for the 2021/22 financial year. 

The presentation provided information on risk areas and management interventions/progress. Then it provided detailed steps which formed part of the audit action plan for the DPWI and PTME on areas such as Property Plant and Equipment (PPE), payables from exchanged transactions, supply chain management and performance information. 

For the full presentation, please see attached 


Ms M Siwisa (EFF) said the late submission of communication between the South African Police Services (SAPS) and DPWI shows there is no urgency and competence. She asked how state property ends up in private ownership. Regional offices are sending reports, and she asked if this referred to actual oversight or reports received in air-conditioned offices. It shows there is no clear monitoring from the Department’s side. 

She asked if the Expropriation Bill was going to serve its purpose, taking into consideration there was currently property which ended up in the private sector.

Three hundred state properties were visited, yet there was a report of only 147, of which 119 were non-compliant. She asked what happened to the rest, and what was done to the non-compliant properties. It does not make sense for state buildings to be sold to the private sector only for the state to rent the same buildings. The Maintenance Plan does not seem to be being followed. Other departments are vacating buildings because of poor maintenance. Handing over property to contractors has a negative effect on society and she asked what the Department is planning to do about this. 

The Department does not know its duties, especially regarding property and ensuring sister departments and any other public bodies have property where it can execute its job. DPWI is very far from ensuring South Africa is moving forward by being effective and allowing departments to do their work.

She advised the panel to return to its vision board to recall its duties. 

Ms S Graham (DA) said the postponement of the previous week’s meeting because the Minister could not attend was frustrating, and he still did not attend the current meeting. It was disappointing to see how unprofessionally the present meeting was conducted, and she hoped it would be better in the future. 

The audit plans sounded great, but they must be implemented. There seem to be a lot of areas in which the Department met the requirements, but it is hard to get a clear picture as the Committee has yet to meet with Auditor-General South Africa (AGSA) to get its side of the story. She was not aware the Department was donating property, and not selling it. She asked what the policy was and also asked if it applied to entities or if it only applied to the PMTE. There was a property in Ekurhuleni where she wrote a letter of inquiry to the Minister. The reply said it did not belong to the Department, but the deed of transfer of the property said it belonged to the Department. This was concerning as the property had issues that needed fixing and no one knew who to contact to resolve them. When a lease agreement is signed between the Department and a client, there should be a commitment for a percentage of the budget to be allocated to day-to-day maintenance. 

She asked if there was a strategy to enforce compliance for the 119 non-compliant public bodies. If so, if it was working or if it would only be applied once the Expanded Public Works Programme (EPWP) policy was implemented. 

A potential manual linking of departments might address the issue of jobseekers not getting employed in other departments if the jobseekers were previously working for a certain department. 

She visited the Periwinkle Gardens in Durban for a sight inspection as the Committee had raised concerns about it since 2021. The state of the accommodation was not pleasant as gutters were not maintained, fences were falling apart, and the grass was not mowed. 

There were people running businesses in the accommodation, and people who were non-military were staying there too. There must be some level of control exercised in these properties. She said she would submit a full report to the Department about the state of the place. 

SAPS was also showing incompetence with the lack of maintenance on its buildings. Some stations did not have fences, a vehicle was stolen from the premises of the police station, and there were electrical connectivity issues. These were the assets of the state which were being devalued by the day because of a complete lack of maintenance, and a lack of repairs and refurbishment. She asked what the Department was doing about unutilised buildings which housed hobos, gangsters, and illegal businesses disrupting the community. 

The Cape Town Castle is a heritage site which was now in a bad state, and it was shocking to see no interventions by the Department. The Department’s job was to look after the property of the state, and this did not seem to be happening. 

Ms M Hicklin (DA) asked what happened with documentation related to the immovable asset register and ensuring its information was correct. The Department had an entire year before it was audited, which meant it had enough time to prepare for the audit. It cannot be accepted that information was submitted late when the Department knew the audit periods and what was expected beforehand. She said she would be travelling to Gauteng soon to perform oversight, especially at the Union Buildings. There was a fence on the floor, which was very concerning, considering the place was a major tourist attraction and a national key point. The Old Synagogue in Tshwane was in ruins; she was promised before the building would be refurbished and would be a home for the Department of Sport, Arts, and Culture. It was also planned to be a conference centre and a heritage site showcasing the Jewish community and South African heritage in Tshwane. 

All these promises were made in 2019 and there were no changes or signs of upcoming change. In the Thaba Tshwane military area, there were buildings whose lifts had been welded shut and it had iron gates in front of it. People who lived on the top floor of the building were forced to drag bin bags down three flights of stairs, the water hoses for fire extinguishers were pouring water out of it, and there was no maintenance. It was concerning to see members of the military who serve the county have to live in places like this. Tenants in small harbours in Cape Town complained about patients who have to go to the sick bay and are being charged an entrance fee. An elderly couple would have to walk long distances to access it. It appears the Department did not uphold these national key points with the pride and care it deserved, and the onus was on it to show South Africans care.  

Mr T Mashele (ANC) asked what the Department’s plan was for the properties it had throughout the country, especially those which are now abandoned and have become drug stands. As far as implementation was concerned, the Department “had its guard down” and he wanted to know what it was planning to do differently to improve service delivery. 

Ms S Van Schalkwyk (ANC) said it was worrisome to see the Department was not implementing the Committee’s recommendations. It was concerning to see state buildings were not properly maintained, and were in the condition it was in. It felt like there had been no impact from the Department since 2019. 

She assumed the internal audit of the Department was able to check what was expected before an audit was done so it could play a proactive role rather than a reactive one. She asked why it seemed the opposite was happening. The internal audit team came into play after an audit by AGSA to remedy the findings. Consequence management in various areas was not implemented and this raised eyebrows. 

She asked the Department to give insight into the workplace skills plans, as it looked like it was not put into place. She asked what was meant by capacity constraints, if it was the human capacity or the financial capacity, as it is impacting the performance of the Department. With the high unemployment rates in the country, it was concerning to see there were so many vacancies which had been open for a long time. She suggested the Department should look at the upward mobility of the current employees, reskill these employees, and help these employees fill the vacant positions as these employees are familiar with how the Department works. It would be advantageous for better service delivery. 

Mr E Mathebula (ANC) said it was unfortunate the Department was not knowledgeable on how state properties ended up in possession of the private sector. He asked how it was going to remedy this situation, as for this to happen, there had to be an act of criminality involved. The Department should investigate this and work toward repossessing these properties. 

The Chairperson said it was a shame the PMTE had regressed in its audit outcomes from a qualified to a disclaimer report. The Committee raised the issues regarding the immovable asset register and monthly leases from time to time because it raised red flags, but the Department had done little to nothing about it. Month-to-month leases should be stopped; leases should be at least two years long. It was scary to see private individuals owned the state buildings, and nothing was being done about it. 

She had previously suggested those buildings should be donated to local municipalities for them to be utilised, but nothing was done. The EPWP issue was reoccurring, which meant the Department had not done anything to solve it and vacancies which were open for years should be filled as soon as possible as South Africa was full of unemployed people who could fill these posts.


Deputy Minister Swarts said although she was new to the Department, she understood the frustrations of the Committee. As long as the Department did not have a paper trail of its properties, things would not change, and there should be a digital system where it could account for all its properties. 

The Department could not keep commenting on policies, good English on paper, and systems which do not exist or were not put into practice. The reason why private individuals owned some state properties was because the state was running in reverse; it was supposed to be generating income instead of letting others generate income on its own properties. The Department was supposed to be run as a Project Management Unit (PMU) because it was a custodian of the bulk out roll of infrastructure to regulate timeframes of the projects taken on.

The 13 harbours under the Department should be able to generate income for the Department. There should be a stage where the Public Works Committee does oversight on the ground and not on paper so the Annual Performance Plan (APP) may be remedied effectively. If the Department says it is working toward hiring skilled people, there should be improvement in its performance with submissions and compliance management. 

If the Department of Health converts a sick bay meant for workers of the ocean to a public clinic without notifying the DPWI, there are bound to be problems with service delivery. 

She said she and the Minister would comment on the other matters once the Department briefs them. 

Dr Alec Moemi, Acting Director-General (ADG), DPWI, assured the Committee it was working hard to address all the deficiencies in the system, considering the challenges it faced were larger than what was mentioned in the meeting. What was mentioned in the meeting were key issues which needed to be prioritised. 

To finalise the action plan drafted, all units involved were compared internally with the key findings stated by the AGSA. A team consisting of chief financial officers and other officials were appointed to monitor the tracking and following up of the key plans. The Department believed when the AGSA came to report to the Committee, it would attest to the progress the Department made with the immovable asset register. 

The AGSA evaluated the action plan and was satisfied with the actions the Department committed itself to at the beginning of the financial year. It said the real test would be if the Department would implement the plans it drafted, although it would take some time to put some plans into action. DPWI was committed to submitting information on time, and that a lot of progress was noted. The tasks the Department was usually beginning to do at this time of the year, based on past years, were almost completed in the current financial year. With this, it was confident it would meet deadlines and achieve a good audit outcome. Where the buildings were under the Department’s control and supervision, it did all it could to maintain them. There were challenges with insufficient budgets and capacity to maintain all the buildings on a day-to-day basis to a point where it would have to identify the most frequently used buildings that directly affect service delivery to citizens. 

Some police stations were devolved to the SAPS after SAPS indicated it would do a better job maintaining it than DPWI would. The Department would usually allocate R100 000 for day-to-day maintenance. The Department took the initiative to fix the electricity issues at the Ga Rankuwa police station, taking note the building devolved and it could not let buildings which were a resource be damaged like this. The National Defence advocated it should take over its entire portfolio. The former ministers were in discussion with the SANDF about this, and the new Ministry must take over this matter. The Department’s capacity challenges were linked to the recruitment processes. Candidates had to meet the quality and skills standards so it could improve the outcomes. The Department continuously worked on finding the best suitable people to fill the open positions.

When the AGSA audits the immovable asset register, it brings heavily experienced Chartered Accountants. The Department has only employed a candidate accountant, which shows more skills need to be acquired within the Department. By doing so, the Department would have the advantage of getting numbers correct on the first try so it did not get as many corrections as it did during the external audit. The sick bay at the harbour was never intended to be a fully fleshed clinic but to attend to fishermen and sailors who may arrive on land seasick or injured. When services were extended for citizens, the Department was not consulted. There was no existing Memorandum of Understanding (MOU) about this, the safety of what must happen at the harbour is at risk and the citizens are also endangered. 

Everywhere else around the country, there should be a payment before these kinds of amenities are accessed. It has always been this way, and a proper conversation needs to be had to build a proper clinic for the ordinary citizens outside the harbour. 

Ms CJ Abrahams, Chief Director: EPWP Partnership Support, DPWI, said the Department had 177 public body visits monitoring if the projects reported by the public bodies were really in motion. The Department gives findings on non-compliance found and continues doing visits until the issue is resolved. 

The business process said relevant officials would be interviewed, inspections would be done, and a report would be formulated to correct the wrongs. An intervention register would be sent to the public bodies with instructions to assign a responsible person by a certain date. If there was no response, the matter would be escalated by issuing escalation letters. There were 97 public bodies currently compliant, and 72 non-compliant organisations were being worked on to reduce the number. Compliance was held in high regard. The Department of Planning, Monitoring, and Evaluation (DPME) and the AGSA were clear about revised frameworks for Strategic Plans (SPs) and Annual Performance Plans (APPs), and the coordination of the Implementation Plan by the Department. The Department was working with the AGSA to ensure compliance. The EPWP was in the APPs of all the 350 public bodies, to show accountability from its side.     

Mr Rachard Samuels, DPWI, said it does not help for the Department to be defensive about the issues raised in the meeting as it has been ongoing for years. It makes sense for the Committee to be looking out to see improvement and performance on the APP, although not all the plans can be fulfilled at once. It would have been impressive if the Custodial Asset Management and the User Asset Management Plans were put into place and there was progress with it, but there are no signs of progress. The Department needs to demonstrate it will do things better, show a different way of executing, and be timely and involved with what is happening on the ground during this remaining period. 

There are many opportunities in the harbour industry that it could use to make a difference. There should be a special portfolio committee with which it could share concrete plans with timeframes, a baseline programme, and implementation plans of projects and processes. Some properties occupied by drug lords and criminals have been taken back, renovated, and put into use by the Department of Social Development for gender-based violence (GBV) programmes. The Department was committed to proving it could do better than before.   

Mr Sithole said there were situations where some departments paid R4.00 per square metre for the properties it was occupying, leaving the DPWI unable to pay rates and taxes. It is very hard for the Department to do day-to-day maintenance when the rent cannot even cover operational costs. The Department was engaging National Treasury and hoping it could intervene in this matter.

Mr Sokhela said where there was a change in ownership of state properties, the Department ringfenced it and the investigations revealed the transfer of properties to private individuals, if fraudulent. The Special Investigating Unit (SIU) and other institutions have been engaged to recover the properties. Last year on 3 September, land worth R144 million was recovered. 

A court order was granted by Justice Ledwaba, authorising the Department to take control of the properties transferred illegally. The Department of Agriculture, Land Reform and Rural Development was engaged to implement certain controls to prevent change of ownership at the Deeds Office. 

Ms Nyeleti Makhubele, Deputy Director-General (DDG): Real Estate Management, DPWI, said it was working on month-to-month leases. There were only 129 existing leases out of 2 100. The Department was working daily to reduce the numbers. 520 leases were expected to expire in the next financial year and the Department was planning on negotiating them with the clients before they expired. 

SAPS was one of the Department’s biggest clients, with almost half of the leases belonging to it, and one to two-year mandates making it hard for the Department to keep up with procurement of leases. It was trying to change mandates to longer periods, and a discussion has started, hoping for longer term mandates. A saving of more than R800 million has been recognised since it started increasing mandate terms. The Department was hoping to achieve more savings in the future.   

Ms Siwisa (EFF) said as a Committee, it not only needed a commitment from the Department. Consequence management should be implemented, and monitoring, evaluation and holding people accountable for actions should be a priority. She still did not understand the logic behind leasing buildings for sister departments but renting them out to private owners.  

Mr Sithole said there were surplus properties which were rented out to private owners as part of revenue generation. Certain programmes like the Refurbishment Operate and Transfer (ROT) invited the private sector to repair a particular property. Its services would be paid over a period of time by the users of the property. This was a model the Department was exploring, starting off with five properties. 

Closing Remarks 

The Chairperson asked for a written response regarding the ROT model as soon as possible, and said the meeting could not continue with the presentation of the Annual Performance Plan because the Ministry had not signed off the APP. 

She noted the Deputy Minister should understand the Committee had always been hands-on with the matters of properties being vandalised and did physical oversight. She appreciated her interest in the small harbours and hoped it would follow through with bettering conditions. She thanked all the attendees for participating in the meeting.

The meeting was adjourned. 


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