DPWI and PMTE Update on Enterprise Renewal Programme; with Deputy Minister

Public Works and Infrastructure

28 February 2024
Chairperson: Ms N Ntobongwana (ANC)
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Meeting Summary

In a physical meeting, the Department of Public Works and Infrastructure (DPWI) briefed the Committee on the enterprise renewal programme. The Committee heard how, in 2011, DPWI approached National Treasury for permission to implement the Enterprise Renewal Programme (ERP). The objective was to move the Department from a Government Transversal system to a Generally Recognised Accounting Practice (GRAP) compliant system. It also decided to digitise the Property Management Trading Entity (PMTE) core business functions.

As part of the ERP turnaround programme, expanded modules of Archibus were added successively and piecemeal bit by bit. A feasibility study was conducted, and the results verified that Archibus matched PMTE requirements.

At a later time, risks identified include poor project governance, unavailability of approved business processes, poor data quality, insufficient change management, and cost overruns.

Through EXCO, a change management committee was established and change agents from the Regional Office were put in place together with a data task team. The Information and Communications Technology (ICT) EXCO sub-committee and ICT Ops were established to facilitate oversight, ownership, and decision making.

An Internal Audit reviewed the ERP programme from 2015 to identify possible material irregularities and to make recommendations in line with the State Information Technology Agency (SITA) assessment.

The Executive Committee established the ICT Steering Committee to monitor the programme continuously going forward.

Committee Members asked about the status of the software and were concerned R152 million was spent on it since 2019. Members asked if the Department could verify the system was going to work; Members wanted to know about the number of modules implemented; which expected modules were going to be implemented; if there was financing for the work; Members asked if there was any investigation after Sage was hacked; asked how DPWI was affected; asked what the ICT staff complement was; and wanted to know if the Department was continuing to pay for a system which was never completed. It appeared the ICT Unit was empty and the Department was paying vast amounts.

The Deputy Minister said it was clear there was no ICT system in the Department and it has not been integrated.

Meeting report

Briefing by the Department of Public Works and Infrastructure (DPWI): Update on Enterprise Renewal Programme
Ms Tsemedi Malapela, Chief Information Officer (CIO), DPWI, said in 2011, the DPWI approached National Treasury for permission to implement the Enterprise Renewal Programme (ERP) Strategy by changing from a Government Transversal system to the Generally Recognised Accounting Practice (GRAP) compliant system. DPWI also decided to digitise the Property Management Trading Entity’s (PMTE) core business functions.

National Treasury granted DPWI permission to procure a Billing and Accounting Solution, and in 2012, with the support of the Accenture Score Card, the Department opted for Archibus as the system.

PMTE tendered to procure a billing and accounting solution with an integration capacity and Deloitte and Touche appointed Sage as service provider, recommending Archibus for an Immovable Asset Register Contract beginning in November 2013 to May 2016. In 2014, Sage began operating the Billing and accounting modules.

DPWI decided to increase Sage’s scope of work by incorporating Lease In, Lease Out, and variable payment modules as part of the system. A feasibility study was conducted, and the results verified that Archibus matched PMTE requirements.

A decision was taken as part of the ERP to implement other expanded modules of Archibus and Logical Data Models (LDM) was sourced and acquired through National Treasury. The LDM contract expired in March 2017.

Also in 2017, poor performance by Deloitte and Touche was attributed to an inability to work on Lease In and led the Information and Communications Technology (ICT) steering committee to release it from delivery of the Lease Out module on condition Deloitte and Touche complete the outstanding issues with Sage by 28 February 2018.

For the period from 14 July 2017 to 28 February 2020, Asset Life Cycle Management (ALCM) was appointed through a tender process and from 2018 to 2020, because of the termination of Deloitte and Touche, AccTech was appointed to attend to the Sage System support and implementation.

Ms Malapela said that in 2015, EXCO decided to implement other expanded modules of Archibus as part of ERP. The decision to opt for Archibus was supported by the Accenture Report and also the Gartner Magic Quadrant report.

Risks included poor project governance, unavailability of approved business processes, poor data quality, insufficient change management, and cost overruns. ICT’s EXCO sub-committee and ICT Ops were established to facilitate oversight, ownership, and decision-making by stakeholders.

EXCO authorised the ERP rollout and appointed a Programme Sponsor. A change management committee was established and change agents from the Regional Office were put in place together with a data task team. All potential threats or uncertainties that might impact the financial aspects of a project were noted to minimise its negative effects, and strategies were identified for implementing them.

On Action plans, an Independent Systems Assessment and Technical Review was initiated to ensure the ERP systems were a fit for the departmental objectives and requirements. The Department carried out an internal audit on the ERP programme from 2015, identified possible material irregularities, and made recommendations in line with the State Information Technology Agency (SITA) assessment.
The Executive Committee established the ICT Steering Committee to monitor the programme continuously going forward.

Mr Sifiso Mdakane, Director-General (DG), DPWI, said it was critical for the Department to execute its functions. The project has been put together piecemeal and it seemed no one wanted to take responsibility but he was in talks with SITA to assist the Department. The report was however silent on consequence management.

(see presentation attached for further details)

Discussion
The Chairperson said Archibus and Sage software were documented in the legacy report of the fifth parliamentary committee and the Department’s responses would be documented in the legacy report too.
She said it was important to have functioning software which was not prone to corruption.

Deputy Minister of Public Works and Infrastructure, Ms Bernice Swarts, apologised for the previous Committee meeting where the Engineering Council of South Africa (ECSA) disrespected the Committee by sending a late apology for its presentation.

The software issues were previously brought up by the Committee but without a functioning ICT system, the Department would not be able to achieve what it wanted to.

Mr I Seitlholo (DA) said there was instability in the Department regarding institutional knowledge and that the Department had to be steered in the right direction. It was good someone was looking into it. Since 2019, more than R152 million have been spent on software. The Committee brought this up before. He asked where the process was now as a new service provider was being appointed. Similar issues were brought up in a previous meeting in 2023. The unoccupied and derelict buildings were a problem for the Department and everything the Department said was going to happen in the previous year did not happen. He asked the Director-General (DG) to look at Circular 135 to help identify which buildings were for leasing and which have been leased. Members of the Committee were not getting assistance from the Department. There were Committee Members who had been attending Committee meetings since 2019, but there was no progress made with the problems the Portfolio Committee discussed. Millions of Rands which could have been applied to other projects were wasted by the Department.

Ms A Siwisa (EFF) said she did not have confidence in the system and asked if the Department was sure the system was going to work.

The DG conceded that confidence in the system was lost, and the challenge was to finalise the asset register so there could be direction.

Ms S Van Schalkwyk (ANC) said the new DG and his team had to change the situation and improve it. There was no financial efficiency in the project and it was difficult to engage about this wastage. She asked about the number of modules implemented; what the expected modules to be implemented were; and if there was finance for work.

The Chairperson asked if there was not an ICT Deputy Director-General (DDG) who had been with the Department since 2019, yet it appeared there were ghosts in the Department. The Department has the potential to be a successful landlord but it was not happening because it does not have a well-functioning ICT system.

The Department also presented the data in the wrong format. The Committee wanted to know about the products procured, service providers contracted and paid, assessment of planned objectives, achievements reached, and failures and possibilities on material irregularities involving the ERP. The report was silent on consequence management.

The presentation was not the report the Committee wanted. The Chairperson asked if there were any investigations after Sage was hacked; how DPWI was affected; what the ICT staff complement was; and she asked why the Department was continuing to pay for a system which was never completed. It appeared the ICT Unit was empty and the Department was paying vast amounts.

She asked why the Department was bringing in SITA as it was never mentioned in the Committee.

The DG said he was aware there was a tender put out to complete what was outstanding. The Department decided to appoint SITA to check the Department’s requirements. The report from SITA would advise the Department. Concerning consequence management, he said most people left the Department and the current leadership must take the matter forward. SITA would unearth what needed to be attended to by management. Regarding why the Department continued to pay for a system not working, he said the tender was cancelled to ensure the issues were addressed.

The DPWI CFO said the Chief Director or Chief Information Officer could furnish an answer, but the matter was being investigated by the South African Police Station (SAPS), and there has been no feedback yet.

Ms Malapela said no further investigation was concluded as the matter went to law enforcement agencies. The ICT strengthened the network security, installed 24-hour security, put more access control measures such as firewalls in place, and were updating the system to respond to external cyber-attacks.

Ms Thembi Hlatshwayo, DDG Corporate Services: ICT, said there were 64 employees in the ICT Unit, including Ms Malapela, two directors, and two deputy directors.

The Chairperson said the Department failed the country considering the software system was never completed. Not all modules have been live. ICT was advancing each day but the Department was stuck with something which was not working.

The Deputy Minister said the Committee was assisting the Department and it was clear there was no ICT system in the Department. It has not been integrated. She said she spoke with the DG to look for ICT service providers even though SITA was appointed, to make presentations in the Department and see who would be able to do what the Department wanted to achieve and get evidence of where the service provider completed an integrated ICT system. The Department appointed a permanent DDG for the PMTE, and improvements were made to the work the Unit completed. There was no asset register in the Department and the Deputy Minister said she was not completely happy with the SITA arrangement.

The Chairperson said vacant positions in the Department were filled with permanent positions and it was an indication of a commitment to positive change.

Committee minutes
The Committee adopted the minutes of 27 February 2024.

The meeting was adjourned.

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