200220: Report of the Portfolio Committee on Public Works and Infrastructure on the 2019/20 First and Second Quarter performance of the Department of Public Works and Infrastructure, the Property Management Trading Entity, dated 27 November 2019

Public Works and Infrastructure

Report of the Portfolio Committee on Public Works and Infrastructure on the 2019/20 First and Second Quarter performance of the Department of Public Works and Infrastructure, the Property Management Trading Entity, dated 27 November 2019

1.BACKGROUND

The Portfolio Committee on Public Works and Infrastructure (hereinafter referred to as the Committee) having considered the first and second quarter performance for the 2019/20 financial year of the Department of Public Works and Infrastructure (hereinafter referred to as the Department), and the Property Management Trading Entity (PMTE), reports as follows:

2.INTRODUCTION

Parliament, through its Committees, has a constitutional responsibility to oversee the quarterly programme performance information of the departments and their entities1 during each financial year. Parliament has a constitutional responsibility to oversee the quarterly programme performance information of the departments and their entities in a specific financial year. The Money Bills Amendment and Related Matters Act (2009) describes the process of exercising this responsibility. It states that portfolio committees of parliament must conduct reviews of the finances of their respective departments and entities and, if required, issue recommendations on the forward use of resources. Quarterly performance reports are a vital tool used by parliamentary committees to ensure accountability and transparency in monitoring both financial and non-financial performance of the departments. Committees conduct oversight over these performance reports to fulfil Parliament’s oversight and accountability mandates in terms of the Constitution and under the rules established by the National Assembly. Except for the Constitution and the Money Bills Amendment Procedure and Related Matters Act, the Public Finance Management Act (PFMA) states that departments and entities are expected to prepare quarterly performance reports within 30 days after the end of each financial quarter of each year. The National Treasury issues Public Finance Regulations and practice notes, that further guide in-year non-financial and financial performance reports that the Director-

1 The performance of the entities were not the specific focus during the quarterly performance review. It must be noted that while there is not a focus on each of the entities on their own, the budgetary allocations reported on and the analyses of the transfers from Programme 4 deals with an aspect of the financial transfers of entities from one quarter to the next. The Committee gives full effect to this aspect of its legal oversight mandate during the annual financial performance review in October each year.

General must make to the Ministers and the National Treasury. These in-year reports form the basis of the quarterly financial reports to parliament’s committees. Committees use the performance information gathered from these reports as the basis of the Budgetary Review and Recommendation Reports after analysing the Annual Reports and Annual Financial Statements of each departments and entities during October each year.

On 21 November 2019, the Committee considered the 2019/20 First and Second Quarter performance of the Department of Public Works and Infrastructure and entities. Performance information was in accordance with the Strategic Plans, Annual Performance Plan and Medium Term Strategic Framework 2015-2020. The report further provides an overview of the presentation made before the Committee mainly focusing on the achievements, output in respect of the performance indicators and targets set for the above-mentioned financial year.

This report focuses on the First and Second Quarter Expenditure for 2019/20 and outlines the queries, findings/observations of the Committee regarding the quarterly non-financial and financial performance of the Department and its entities.

3.MANDATE OF THE DEPARTMENT

Constitutional mandate

The Constitutional mandate is provided for in Schedule 4, Part A, of the Constitution of the Republic of South Africa: Functional Areas of Concurrent National and Provincial Legislative Competence.

3.2.Legislative mandate

The Government Immovable Asset Management Act, 2007, primarily governs the legislative mandate.

The Department regulates the construction industry and built environment through the Construction Industry Development Board Act, 2000 (Act No. 38 of 2000) and the six Professional Council Acts that regulate the six Built Environment Professions (BEPs), and through the Council for the Built Environment Act (Act No. 43 of 2000)

3.3.Policy mandates

DPW White Paper: Public Works, Towards the 21st Century, 1997
DPW White Paper: Creating an Enabling Environment for Reconstruction, Growth and Development in the Construction Industry, 1999
Construction Sector Transformation Charter, 2006

Property Sector Transformation Charter, 2007

DPW Broad-based Black Economic Empowerment Strategy, 2006

Property Management Strategy on BBBEE, Job Creation and Poverty Alleviation, 2007
Green Building Framework, 2011

4.HIGH LEVEL SUMMARY OF 2019/20 QUARTER ONE AND TWO

The Department of Public Works and Infrastructure received an adjusted budget allocation of R7, 8 billion for 2019/20 with which to accomplish its priorities.

Table 1: Summary expenditure per programme

Programmes	Adjusted Allocation	Exp. as at 30 September 2019	Variance as at 30 September 2019	% Spent as at 30 September 2019	Drawings as at 30 September 2019	Expenditure Versus Drawings variance
Programmes	R'000	R'000	R'000	%	R'000	R’000
1. Administration	511 013	219 538	291 475	43%	247 507	27 969
2.Intergovernmental Coordination	56 386	28 554	27 832	51%	32 049	3 495
3. Expanded Public Works Programme	2 680 814	1 250 691	1 430 123	47%	1 367 147	116 456
4.Property and Construction Industry Policy and Research	4 438 905	2 229 410	2 209 495	50%	2 233 915	4 505
5. Prestige Policy	119 927	49 334	70 593	41%	70 198	20 864
Total	7 807 045	3 777 528	4 029 518	48%	3 950 816	173 288

Table 2: Summary expenditure per economic classification

Economic classification	Adjusted Allocation	Exp. as at 30 September 2019	Variance as at 30 September 2019	% Spent as at 30 September 2019	Drawings as at 30 September 2019	Expenditure Versus Drawings variance
Economic classification	R'000	R'000	R'000	%	R'000	R’000
Compensation of employees	557 826	247 851	309 975	44%	267 998	20 147
Goods and services	451 994	180 805	271 189	40%	253 500	72 695
Interest	-			-	-
Transfers and subsidies	6 773 984	3 337 228	3 436 756	49%	3 416 368	79 140
Machinery and equipment	23 241	11 644	11 597	50%	12 950	1 306
Total	7 807 045	3 777 528	4 029 518	48%	3 950 816	173 288

Find here: Figure 1: DPWI and PMTE % performance (Q1)

The DPWI and the PMTE reported that the following challenges were experienced during this quarter:

Insufficient response from the market for procurement spent for bids awarded to designated groups (Supply Chain Management (SCM) : Programme 1);
Lack of available business representative for condition assessment module as per Enterprise Renewal Programme (ERP) implementation plan (Corporate Services (CS) Programme 1);
Conceptual framework towards finalization of the Sector Plan was presented to Technical MinMec and MINMEC2 pending implementation of the recommendations and delayed by external partners in signing agreements for joint service delivery (Intergovernmental Coordination (IGC3) Programme 2);
The Department has discontinued with the Academy plan due to financial constraints (Professional Services (PS) Programme 2);
Work Opportunities target not achieved and less achievement in participation by designated groups such as Youth and Women and delays in the finalisation of the legal verification processed led to delays in signing the Memorandum of Agreement for the implementing agent (Expanded Public Works Programme (EPWP): Programme 3);
Process on the development of the Public Works Bill was affected by the transition from 5th to 6th Administration on the (Property and Construction Industry Policy and Research4: Programme 4).
The Work Opportunities target stated in planning documents were not achieved. Lower participation by designated groups such as Youth and Women was reported, and delays in the finalisation of the legal verification processed led to further delays in signing the Memorandum of Agreement for the implementing agent (EPWP: Programme 3);
The slow process developing the Public Works Bill was delayed by the transition from the 5th to the 6th Administration on the (Policy: Programme 4). The Committee previously stated its concern with the lack of capacity to review the White Papers and produce a draft Public Works Bill inside the Policy branch. The review of the second White Paper had to result in amendments to the legislation that had to strengthen the functions of respectively the Construction Industry Development Board (CIDB) to transform the construction industry, and the Council for the Built Environment (CBE)

2 The Minister’s meeting with the Members of the Executive Councils responsible for public works functions in provinces. The technical MinMec consists of the Director-General (DG) of the national DPWI and the nine Heads of Departments of Public Works in each province. The DG convenes this structure that supports the MinMec. The Regional Office heads and relevant Directors-General also serves on this technical structure.

3 Note that in various planning documents, this sub-programme is referred to as Intergovernmental Relations (IGR). The name has been changed to emphasise the coordinating function of the DPWI and the PMTE across government departments and levels.

4 In planning documents of the DPWI, Programme 4 is often abbreviated as merely, Programme 4: Policy or as Policy: Programme 4.

to, amongst others, ensure a proper professional registration pipeline of built environment graduates.

Overall performance Comparison from Quarter 1 to 2:

The DPWI achieved 75% of its performance targets and the PMTE reported an achievement of 50% of its performance targets during Quarter 1 of 2019/20.

The DPWI achieved 53,6% of its performance targets and the PMTE reported an achievement of 56,3% of its performance targets during Quarter 2 of 2019/20.

5.OVERVIEW OF THE 2ND QUARTER EXPENDITURE

The Department received a voted allocation of R7.81 billion for 2019/20 with which to accomplish its priorities. This represents an increase of 4.4% in nominal terms, and a decline 0.81% in real terms (calculating the impact of inflation) from the 2018/19 adjusted appropriation of R7.48 billion. The Department’s budget represents approximately 0.1% of the national appropriation by vote, excluding direct charges. During the adjustments process, the Department’s allocation increased to R7.91 billion (discussed below).

The R100 million of the increased allocation went to Programme 4, towards the small harbours programme for the improvement of public infrastructure projects.5

In terms of Departmental receipts, revenue increased under interest, dividends and rent on land by R10.8 million from a budget estimate of R600 000. The Committee noted that the Department had to clarify the discrepancy between what was estimated, the actual revenue generated, as the explanation provided in the (Adjusted Estimates of National Expenditures (AENE) was insufficient.6

5.1.QUARTER 2 EXPENDITURE PER PROGRAMME

5 National Treasury (2019d), p. 103.

6 National Treasury (2019d), p. 106.

Table 1 provides an overview of the Department’s expenditure per programme in relation to the available budget for the 2nd quarter of the 2019/20 financial year.

Table 3: 2019/20 Budget and Expenditure Vote 11 - Public Works and Infrastructure

Programme R' million

Adjusted Budget

Q2 Actual Expenditure

Actual Expenditure as a % of Adjusted Budget

Q2 Projected Expenditure

Variance from Projecetd Expenditure

% variance of Projecetd Expenditure

Administration
Intergovernmental Coordination
Expanded Public Works Programme
Property and Construction Industry Policy and Research
Prestige Policy

511.0

56.4

2,680.8

4,538.9

119.9

219.5

28.6

1,250.7

2,229.4

49.3

43.0%

50.6%

46.7%

49.1%

41.1%

247.5

32.0

1,367.1

2,233.9

70.2

-‐28.0

-‐3.4

-‐116.4

-‐4.5

-‐20.9

-‐11.3%

-‐10.8%

-‐8.5%

-‐0.2%

-‐29.7%

Total

7,907.0

3,777.5

47.8%

3,950.7

-‐173.2

-‐4.4%

In Quarter 2, R3.78 billion (or 47.8%) of the total adjusted allocation of R7.91 billion was spent, when compared to the R3.66 billion spent during the same period in the previous year.7 One of the five main programmes managed to slightly exceed the maximum expenditure rate of 50%. Programme 2 spent R28.6 million (or 50.6%) of the adjusted R56.4 million.

The expenditure of the following four programmes was under 50%:

Programme 1 spent R219.5 million (or 43.0 %) of the adjusted allocation of R511.0 million. While, Programme 5 spent the least at R49.3 million (or 41.1%) of the R119.9 million adjusted allocation for 2019/20.
Programme 3, spent R1.25 billion (or 46.7%), of the R2.68 billion allocation.
Programme 4 spent R2.23 billion, which constitutes 49.1% of the R4.54 billion adjusted allocation.

The Department explained Quarter 2 under- and/or over-expenditure as follows:8

R28.0 million (11.3%) underspent under Programme 1 of the projected R247.5 million, due to delays in filling vacant positions; late receipt of invoices from service providers for computer

7 National Treasury (2018), p. 50.

8 National Treasury (2019c), p. 51.

services and communication; as well as lower than projected value of actual invoices received for municipal services.

R3.4 million (10.8%) underspent under Programme 2 of the projected R32.0 million was explained as due to underspending on Compensation of Employees due to the non-filling of vacant positions; as well as minor underspending across the different goods and services items.
R116.4 million (8.5%) underspent under Programme 3 of the projected R1.37 billion with slow spending in the compensation of employees’; goods and services; and under-transfers and subsidies. The low spending under Goods and Services (Agency and support/outsourced services) was explained as due to delays in the submission of invoices by service providers for EPWP projects. Slow spending under Transfers and Subsidies of the EPWP Integrated Grant for Provinces, and transfers to provinces that were withheld due to such provinces not complying with requirements of the Division of Revenue Act (DORA).
R4.5 million (0.2%) underspent under Programme 4, of the projected R2.23 billion, was explained as due to the lower than expected spending under the budget for compensation of employees’. This was due to vacant posts, and lower than projected spending under Goods and Services budget across different items.
R20.9 million (29.7%) underspent of the projected R70.2 million under Programme 5, with lower spending specifically on contractors due to non-receipt of invoices for the Presidential Inauguration, as final invoices that during the period under review, was outstanding from the Presidency.

5.2.EXPENDITURE BY ECONOMIC CLASSIFICATION

Table 4: Expenditure by economic classification at the end of Quarter 2 for 2019/20

Economic Classification R' million

Adjusted Budget

Q2 Actual Expenditure

Actual Expenditure as a % of Available

Budget

Q2 Projected Expenditure

Variance from Projected Expenditure

% variance of Projected Expenditure

Current Payments Compensation of Employees Goods and Services

Interest and Rent on Land Transfers and Subsidies Payments for Capital Assets

Payments for Financial Assets

1 009,7

557,8

451,9

6 873,9

23,2

428,7

247,9

180,8

3 337,2

11,6

0,4

44,4%

40,0%

48,5%

50,0%

521,5

268,0

253,5

3 416,4

13,0

-‐92,8

-‐20,1

-‐72,7

-‐79,2

-‐1,4

-‐17,8%

-‐7,5%

-‐28,7%

-‐2,3%

-‐10,8%

Total

7 906,8

3 777,5

47,8%

3 950,9

-‐173,4

-‐4,4%

5.2.1.Current Payments

A total of R1.01 billion was allocated to Current Payments for 2019/20, which is an increase of R59.9 million from the R951.5 million allocated in 2018/19. Of this amount R557.8 million was allocated to Compensation of Employees, which is an increase of R59.9 million from the R518.3 million allocated in 2018/19.9

At the end of the 2nd quarter of 2019/20, R247.9 million (44.4%) was spent on Compensation of Employees, which is an increase of R4.2 million from the R243.7 million spent in 2018/19. This is an under expenditure of R20.1 million of the projected spending of R268.0 million for quarter 2.

Goods and Services received an allocation of R453.5 million for 2019/20, which is an increase of R20.3 million from the R433.2 million allocated in 2018/19. A total of R180.8 million was spent at the end of the 2nd quarter of 2019/20, which is a decrease of R77.4 million from the R258.2 million spent during the same period in 2018/19. This is an under expenditure of R72.7 million of the projected spending of R253.5 million during the 2nd quarter.

Interest and Rent on Land received 0 allocation in the 2nd quarter of 2019/20, similar to that of 2018/19.10

5.2.2.Transfers and Subsidies

A total of R6.87 billion was allocated towards Transfers and Subsidies for the 2019/20 financial year, which is an increase of R296.1 million from the R6.48 billion allocated in 2018/19.

An amount of R3.34 billion was transferred during the 2nd quarter of 2019/20,11 when compared to the R3.15 billion spent in 2nd quarter of 2018/19.12 This is a decline of R35.0 million or 20.5% in transfer payments. This is an under expenditure of R79.2 million of the projected transfer of R3.42 billion during the 2nd quarter.

9 National Treasury (2019b), p. 44.

10 National Treasury (2019c), p. 50.

11 National Treasury (2019b), p. 46.

12 National Treasury (2018), p. 42.

Of the allocations for transfers and subsidies, a total of R2.35 billion, (from the R2.24 billion in 2018/19) representing a nominal increase of 5.0% and (a decrease of 0.2% in real terms) goes towards the EPWP: Non-State Sector; and Integrated Grants for Municipalities and Provinces. Of this amount, R1.60 billion is assigned to Conditional Grants to Provinces and Municipalities and is allocated as follows:

The EPWP Integrated Grant for Municipalities was allocated R730.0 million an increase of R37.1 million from the R692.9 million allocated in 2018/19. At the end of the 2nd quarter of 2019/20, R182.6 million (or 25%) of the allocation was transferred.

The EPWP Integrated Grant for Provinces received an allocation of R437.4 million for 2018/19, which is an increase of R21.4 million from the R416.0 million allocated in 2018/19. A total of R231.4 million (or 52.9%) was transferred by the end of the 2nd quarter of 2019/20.

The Social Sector EPWP Integrated Grant for Provinces received an allocation of R430.8 million for 2019/20, which is an increase of R22.9 million from the R407.9 million allocated in 2018/19. A total of R297.6 million (or 69.1%) was transferred by the end of the 2nd quarter of 2019/20.13

Departmental Agencies and Accounts (non-business entities) receives R4.38 billion, which is an increase R212.9 million from the R4.16 billion received in 2018/19, of which:

R600 000 was allocated to the Construction Education and Training Authority (CETA), (an increase of R100 000 from the R500 000), which constitutes an increase of 14.1% in real terms. The amount was transferred in quarter 2.

R10.6 million was allocated to Parliamentary Villages Management Board, which is an increase of R200 000 from the R10.4 million allocation for 2018/19. The allocation was transferred in its entirety, by the end of the 1st quarter of 2019/20.

13 National Treasury (2019b), p. 46.

R76.2 million was allocated to the Construction Industry Development Board (cidb) for

2019/20, (a nominal increase of R2.9 million from R73.3 million), but a decline of 1.2% in real terms from the previous year. Of this amount, R38.1 million (or 50%) was transferred to the entity for operations at the end of quarter 2.

R4.22 billion was allocated to the Property Management Trading Entity (PMTE)14 for 2019/20, which is an increase of R206.2 million (a decrease of 0.1% in real terms) from the R4.01 billion allocation of 2018/19. A total of R2.11 billion (or 50%) was spent in quarter 2 of 2019/20.

R52.8 million was allocated to the Council for the Built Environment (CBE) for 2019/20, (an increase of R2.7 million from R50.1 million) and 0.2% in real terms. A total of R26.4 million (or 50%) was transferred in quarter 2 towards the operations of the entity.

The Department also made transfers to:15

Agrément South Africa is allocated R31.1 million, (an increase of R1.1 million) from the R30.0 million allocation of 2018/19. A total of R15.5 million (or 50%) was transferred in quarter 2.

Foreign Governments and International Organisations16 received an allocation of R26.6 million, an increase of R3.9 million (11.4% in real terms) from the R22.7 million allocated in 2018/19. The amount had not been transferred by the end of the 2nd quarter.

The AENE reported on declared unspent funds under the Commonwealth War Graves Commission and increased funding for the PMTE for infrastructure projects of small harbours as follows:

R24.6 million spent in 2019/20 under the Foreign Governments and International Organisations of an allocation of R26.6 million. A total of R1.94 million was declared as unspent funds, due to

14 The allocation for the Property Management Trading Entity (PMTE) falls under Programme 4. In 2015/16 the PMTE, was operationalised from having functioned as a Trading Account since its inception in April 2006.

15 National Treasury (2019c), p. 48.

16 National Treasury (2015), p. 193. This payment is made to the Commonwealth War Graves Commission of which South Africa is a member. It is comprised of 6 member countries: Australia; Canada; India; New Zealand; South Africa and the United Kingdom.

lower than expected spending on the transfer to the Commonwealth War Graves Commission, which is usually negatively impacted by the fluctuations in the foreign currency exchange rate.

A total of R5.0 million was allocated to Public Corporations towards the operations of the Independent Development Trust (IDT) in 2019/20, (a decline of R23.4 million or 83.3% in real terms) from the R28.4 million allocation of 2018/19. The total was expended at the end of the 1st quarter.

The IDT is a Schedule 2 entity, should be self-sustaining and therefore not receive an allocation from the Department, as is the case for Schedule 3 entities. This allocation from the Department, should be viewed as assisting in the continued operational functioning of the entity, in the context of the IDT having developed into a responsive development agency with a well-established presence across the country. The IDT’s total budget for 2019/20 is R386.6 million.17

A total of R750.4 million was allocated to the Non-Profit Institutions, which is an increase of R30.3 million from the R720.1 million allocated in 2018/19. The allocation was disaggregated into the following two Non-State Sector allocations:

The Non-State Sector: Work Opportunities was allocated R719.0 million for 2019/20, which is an increase of R28.6 million from the R690.4 million allocated in 2018/19. None of the allocation was transferred by the end of the 2nd quarter of 2019/20, notwithstanding, the projected expenditure of R359.5 million for quarter 2.18

The Non-State Sector: Non-Wage Costs was allocated R31.4 million in 2019/20, which is an increase of R1.7 million from the R29.7 million allocated in 2018/19. The allocation was not spent at the end of the 2nd quarter of 2019/20. Although the Department reported a projected expenditure of R31.4 million at the end of the 2nd quarter.

During a presentation to the Portfolio Committee on Public Works and Infrastructure, the IDT indicated that the Non-State Sector did not manage to begin implementation due to delays in

17 National Treasury (2019), p. 230

18 National Treasury (2019c), p. 52.

the signing of Memorandum of Agreement (MOA) with the Department.19 The IDT is also responsible for exercising due diligence after the IDT and the Non-Profit Organisations (NPOs), signed agreements. This due diligence importantly means, for example, the verification of each the NPOs registration status and ‘the Identity Documents of beneficiaries. The IDT indicated that this is a time-consuming aspect of the process that continued to delay the signing of performance agreements and the start of the NPO sector. The EPWP Chief Directorate and the IDT responsible for the NPO sector explained to the Committee that once this process was finalised, the reporting of numbers to achieve the stated targets in planning documents, will be swiftly reached.

5.3 Payments for Capital Assets

Payment for Capital Assets received an allocation of R23.2 million for 2019/20, compared to R23.5 million for 2018/19, a decrease of R300 000. A total of R11.6 million was spent in the 2nd quarter of 2019/20, compared to R2,4 million in the 2nd quarter of 2018/19. This is a decrease of R1.3 million of the projected R13.0 million at the end of the 2nd quarter of 2019/20.

6.QUARTER 2 SELECTED PERFORMANCE INFORMATION 20

With the inclusion of the infrastructure component under the newly formed Department of Public Works and Infrastructure, the former Department of Public Works has to take into consideration the impact this will have on the programmes that were designed to implement the legal mandate of the DPWI and the PMTE. The Department’s organisational structure and budget might be impacted once the final stages of agreements were concluded on the transfer of the infrastructure function from National Treasury and the Department of Economic Development.21

This section provides a select overview of the Department’s performance at the end of the 2nd quarter of 2019/20.

In terms of mid-year performance, the Department reported the following:22

19 Department of Public Works (2019), Slide 12.

20 This information was drawn from the 2019 Adjusted Estimates of Nation Expenditure, as National Treasury had still to publish the Quarter 2 Performance Report, which only occurred in mid-November 2019.

21 National Treasury (2019d), p. 99.

22 National Treasury (2019c), pp. 99-100.

five of the planned 15 protocol agreements were signed with provinces and municipalities for

joint service provision at the end of the 2nd quarter of 2019/20. The lower than planned targets was due to delays in finalising agreements between the Department and provinces and administrative changes related to the transition from the fifth to the sixth administration. The remaining agreements were to be signed in the 3rd and 4th Quarters of 2019/2020.

The development of a Policy Framework for the Public Works sector was planned, but was not yet drafted by the 2nd quarter of 2019/20. The DPWI stated its intention to complete and finalise the Policy Framework and Prestige Policies in the fourth quarter of 2019/2020.
510 750 of a targeted 981 497 EPWP Work Opportunities reported on the reporting system. The target was revised downward from the 1.46 million reported in the 2019 ENE, to align with the Department’s 2019/20 Annual Performance Plan.
154 of a planned 290 public bodies reporting on EPWP targets provided with technical support.

7.FINDINGS AND OBSERVATIONS

The Portfolio Committee made the following observations and findings:

The Committee noted the Department’s explanation that it continued to experience challenges with the fluctuation in the exchange rate when making payments to the Commonwealth War Graves Commission: Maintenance of Soldiers’ Graves. This often resulted in over and/or under expenditure under this sub-programme.

The Department realigned its main and sub-programmes and highlighted the role of the PMTE as the implementer of its legal mandate of providing accommodation, and managing the real estate of National Government.23 With this transformed arrangement where the PMTE is a separate, ring-fenced Government component within the Department as the implementer of its property, property management, maintenance, and construction business, the Department’s role is as the national policymaker, standard- setting, regulator.

With the establishment of the PMTE, all accommodation-related costs were devolved to Client Departments. In this regard, it had been issuing invoices and collecting user charges

from Clients on a quarterly basis, based on amounts devolved to them. However, the Department reported that the receipt of invoices was slow and therefore affected paying invoices within the legal stipulated 30-days. The Committee noted that there had been significant improvement in this regard. However, the sustainability of this seemed to depend on the leadership exercised by the Minister herself. The Department had to ensure that it had systems in place to ensure that it acted in compliance without being forced to do so.

The Department further reduced its expenditure on consultants and outsourced services as it was in the process of ensuring that the staff within the Department executed the necessary functions. The Department reported slow spending under Compensation of Employees and Goods and Services. This was mainly due to non-filling of vacancies or payment for goods and services due to non-receipt of invoices under Programmes 1, 2, 3, 4 and 5. The non-filling of vacant positions, particularly those identified as technical and specialist posts, remained crucial to the optimal functioning of the PMTE and the Department.

The Department continued to face the possibility of being in non-compliance of the DORA regulations under Programme 3: EPWP. It also faced challenges when client departments such as the Presidency did not forward invoices to pay contractors in time following the Inauguration. The Committee was concerned that these may feature in the audited outcomes of the Annual Financial Statements in October 2020. The Department should inform the Committee of the steps it was putting in place to address these matters to avoid a negative audit opinion from the Office of the Auditor-General.

The Committee raised the challenge with the politicization of the selection process of beneficiaries to EPWP projects. This caused tensions in communities and needed attention. In response, the Deputy Director-General (DDG) responsible for Programme 3: EPWP stated that it had to be understood that the Department played a coordinating role running these projects across the national, provincial and local government sphere. The EPWP branch developed regulation and uniform standards of beneficiary selection that all departments, provinces and municipalities had to follow. He urged Members and communities to bring information on specific instances where the selection of beneficiaries was being politicized as this was causing rifts within local communities that was contrary to the nation-building task of government. It had to be remembered that the EPWP was government’s public employment programme (PEP) and was

an active nation-building programme that unified people and that it should never be abused for political or other gain.

In the non-profit organization (NPO) sector24, the EPWP reported reasonable success with employing beneficiaries with disabilities. In other sectors, the numbers of beneficiaries with disabilities required intervention. It had to be understood that in a sector such as infrastructure, the numbers might naturally be lower as the physical nature of certain projects prevented the full participation of people with disabilities. The Department was engaging with a range of organizations working in the disability sector to arrange a two-day colloquium to share ideas of methods through which people with disabilities can participate in higher numbers.
The Committee questioned the R10.5 million that was allocated to the Parliamentary Villages Management Board. The DPWI (Chief Financial Officer) CFO explained that it was specifically allocated for the transportation of Members of Parliament to and from Parliament as well as for the transportation to schools for children residing in the Parliamentary Villages.

The proper processing of invoices by contractors and service providers was a major contributor to under-expenditure. The Department was continuing the fast tracking of the payment of invoices within the required timeframe of 30-days.

Disciplinary processes into alleged fraud and corrupt activities were always protracted. This enabled such employees to resign before they could account for such allegations in court. The current legislation was silent on how to deal with employees who resigned at the tail end of investigation processes into alleged corrupt activities. The trend of resigning and moving to employment in other departments and or regions was unfortunately continuing.

24 This was despite of the MOA between NGOs and the IDT (that performs the data collection and verification function) delayed the reporting of employment opportunities.

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