Public Works Strategic Planning Workshop wrap-up

Public Works and Infrastructure

11 March 2008
Chairperson: Ms T Tobias (ANC)
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Meeting Summary

The meeting was a follow up of a workshop organized by Afrec; a Cape Town based consultancy company which had been tasked with improving strategic management skills for the Department of Public Works. The consultants presented their findings on the Department’s expenditure and its overall functions, noting that the main problems in the plans were that the indicators could not be measured. It was said that the Department must formulate strategic plans with measurable indicators and targets for performance. Performance evaluation served as a basis for comparisons and benchmarking with other departments, as also to measure the impact of its work. 

Members asked questions on what caused problems in the Department and what could be done to remedy them. It was found that the main problem in the Department of Public Works lay in management and administration. There were vacant posts that took too long to be filled and general structural problems. The consultants recommended a review of the Department’s strategic goals. The Committee asked if performance could be monitored monthly and quarterly, but it was cautioned that this might lead to ineffective spending. The role of National Treasury, the interaction with other departments, monitoring of quality, lack of progress reports in respect of ongoing work, and proper advance prioritisation of projects were all identified as issues to be addressed.

Meeting report

Afrec: Report back on Workshop for Department of Public Works (DPW)
The Committee heard a report from Afrec, a consultancy company based in Cape Town which had been tasked with hosting a training workshop for the Department of Public Works (DPW). The presentation by Afrec mainly dealt with public expenditure management, and how the Department of Public Works could improve its performance.

Mr Ghalieb Dawood, Public Sector Economist, Afrec,  stated that the Department had to formulate strategic plans that included measurable objectives as well as performance measures and targets. He added that there had to be a public expenditure management cycle that was in line with strategic plans. He gave guidelines of how the Department could formulate its strategic plan and noted that it was a constitutional requirement to evaluate departmental performance so as to ensure that its mandate was fulfilled. Performance evaluation also showed whether the objectives in the strategic plan were achieved. He also said that performance evaluation served as a basis for institutional comparison to assess whether this Department performed below or above the benchmark. Assessing the impact of departmental services was another reason for Departmental performance assessment.

Mr Dawood said that there was also a need to formulate measurable objectives as that would enable an assessment of whether the intended impacts were achieved. Mr Dawood noted that the present objectives in the department’s strategic plan could not be measured. He added that there was a need for effective and efficient strategic management, which included performance management indicators. Poor planning was the reason for under spending in the department.

Discussion
The Chairperson wanted to know if performance could be monitored monthly and quarterly and if possible, how it could be done.

Mr Dawood said that senior managers who checked junior managers’ performance could measure the performance pattern.

Ms N Ngcengwane (ANC) wanted to know what could be the remedy for under spending.

Mr Dawood said that under spending was a structural problem. Scarce resources inhibited reaching departmental goals. Shortage of skilled personnel and appropriate materials was also a problem.  He added that internal processes within Departments were also a problem as they operated independently, though their work was integrated. This was a management issue and there was need for better coordination.

The Chairperson wanted to know if the National Treasury was monitoring expenditure and whether it was aware that it was supposed to allocate more resources to employ more people.

Mr Dawood responded that the National Treasury played an oversight role. Vacancies were the responsibilities of executives in departments, who must ensure that all vacancies were filled. Mr Dawood noted that in most cases there were no skilled personnel available to fill the posts.

Ms Ngcengwane said the Committee wanted to ask for monthly, as opposed to quarterly reports so that they could deal with under spending.

Mr Dawood cautioned that demanding monthly reports as a remedy to deal with under spending might lead to inefficient spending. He said that resolutions contained in the report should be monitored and implemented.

The Chairperson said that the Department of Public Works interacted with other departments in projects, and that financial dumping seemed to be prevalent at the end of the financial year.

Mr Dawood said interdepartmental arrangements were a problem, but project plans could be evaluated to avoid waste of resources. He added that there was need for proper planning to ensure that procurement was in line with the budget.

Mr N Magubane (ANC) said there was need to set up mechanisms to deal with financial dumping and also noted that all departments had roll over.

Mr L Maduma (ANC) said that in regard to completed projects some buildings financed by the government did not last long and that they did not meet quality standards. He asked how such projects were monitored.

Mr Dawood said that in terms of Performance Management Indicators quality should be given priority instead of quantity.

Ms C Ramotsamai (ANC) asked how the Committee could assess quality of projects if they were not technically competent. She asked how Performance Management Indicators (PMI) could be involved in technical deliveries.

Mr Dawood said that the Performance Management Indicators must be included in the strategic plan. Field experts could also be used to provide evaluation reports for the Committee.

Ms Ramotsamai wanted to know what could be done in the case where work was still in progress and progress reports were not provided because of that.

Mr Dawood said that it was unacceptable and said this situation would result from unspecified PMI. He said there was a need to give progress reports in phases.

Mr S Opperman (DA) asked what could be done with extra funds from the budget, and whether the money could be used only for planned projects and if that did not influence financial dumping.

Mr Donald Maphiri, Senior Specialist: Public Finance, Afrec,  responded that planning was the fundamental problem as the Department would only realise that it had under spent at the end of the financial year and thus would resort to financial dumping. He said that proper planning was the solution to the problem.

Mr Magubane said that there should be a plan in place to isolate and coordinate plans for the subsequent financial year. Parliament should not leave everything to departments. Proper planning in advance could lead to prioritisation of projects in the financial year and reduce financial dumping.

Mr Maphiri noted the inconsistencies in financial statements, stating that maintenance and capital payments seemed to be intertwined. He said that it was a misclassification problem,  thus they should be separated. He added that internal financial controls were ineffective and managerial issues had to be solved, as the financial manual was not being followed.

Mr Magubane asked what processes were in place to correct the problems.

Mr Maphiri said that the Auditor General did not have the power to do anything except make an observation in regard to adverse problems.  He added that some assets were excluded from the asset register and that internal asset management was a problem connected to management.

Mr Maphiri added that there had been virements reflected in the Department’s appropriation statement, which may be due to unplanned customisation and other projects being incorporated into the budget. Mr Maphiri stated that the income statement showed a R170 million surplus, as opposed to the R92 million under spending. He also said that there were inconsistencies in the budget.

Furthermore, personnel and funded posts had caused a problem because there had been failure in filling the posts that were included in the budget. He said that consultants were used in place of employing personnel, as this was less expensive.

The meeting was adjourned.

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