ATC200714: Report of the Select Committee on Transport, Public Service and Administration, Public Works and Infrastructure on Budget Vote 13: Public Works and Infrastructure, in the Adjustments Appropriation Bill, 2020, on the Shifting of Funds within the Budget Vote, dated 14 July 2020

NCOP Transport, Public Service and Administration, Public Works and Infrastructure

REPORT OF THE SELECT COMMITTEE ON TRANSPORT, PUBLIC SERVICE AND ADMINISTRATION, PUBLIC WORKS AND INFRASTRUCTURE ON BUDGET VOTE 13: PUBLIC WORKS AND INFRASTRUCTURE,IN THE ADJUSTMENTS APPROPRIATION BILL, 2020, ON THE SHIFTING OF FUNDS WITHIN THE BUDGET VOTE, DATED 14 JULY 2020

 

The Select Committee on Transport, Public Service and Administration, Public Works and Infrastructure, having received a briefing from the Department of Public Works and Infrastructure on 9 July 2020 on the shifting of funds within Budget Vote 13, reports as follows:

 

1.  INTRODUCTION

This report is made for the purpose of informing the National Council of Provinces (Council) of the programmatic amendments that were made to the allocations for 2020/21, within the programmes in Vote 13: Public Works and Infrastructure.

The fiscal and economic impact of the national state of disaster that was declared as a result of the COVID-19 pandemic has made it necessary for the Minister of Finance to table a special adjustments budget to revise government’s spending priorities for 2020/21.

This adjustment was made as per section 30(1) of the Public Finance Management Act (PFMA) (1999). This sectionof the PFMA empowers the Minister of Finance to table an adjustments budget in the National Assembly when necessary.

Section 30(2) of the PFMA specifies the type of spending that the adjustments budget may make provision for; accordingly, this special adjustments appropriation makes provision for:

• Adjustments due to significant and unforeseeable economic and financial events: these adjustments are required either due to a significant reduction in government revenues and/or changes in spending priorities in response to the COVID-19pandemic.
• Virements and shifts within the vote: a virement is the use of unspent funds from amounts appropriated under one main division (programme) to defray excess expenditure under another main division (programme) within the same vote[1]. The virements included in this adjustments budget are mainly those intended to respond toCOVID-19.

 

1. THE IMPLICATIONS OF THE COVID-19 PANDEMIC ON THE MANDATE OF THE DEPARTMENT

The Department of Public Works and Infrastructure (DPWI) does not provide services directly to the public. It coordinates and provides professional accommodation, and technical professional built environment, construction, project management, and maintenance services to service delivery-focused departments such as the Department of Health (DoH), Department of Home Affairs (DoHA), Department of Basic Education (DBE), and Department of Social Development (DSD).

TheCOVID-19 pandemic necessitated that the DPWI had to:

• assist the Department of Health with the identification and coordinating the preparedness of quarantine sites;
• assist the Department of Basic Education with the sanitisation of schools and other amenities;
• assist the Department of Home Affairs with the preparation of and supply of accommodation sites for South Africans that returned from foreign countries at the onset of the pandemic in those foreign countries.

To perform these functions adjustments had to be made to financial allocations of specific programmes in the initial budget allocation to the department.

 

1. ANALYSIS OF THE REVISED BUDGET ON EACH PROGRAMME

Internal adjustments amounting to R2.2 billion were made to three areas as follows:

R thousand	Downward revisions	Reallocations	2020/21 Totalnet change
COVID-19 preparations: Reprioritised funds used to provide additional beds as part of the COVID-19 response by hiring hotel accommodation and repairing state-owned accommodation at Salvokop and Pretoria West College	-829 000	829 000	–
Expanded Public Works Programme: Reprioritised funds will be used to recruit 45 445 participants across the country for 10 months to help clean and sanitiseschools	-771 000	771 000	–
Ports of entry: Reprioritisation to fund the quarantine of individuals entering South Africa and detection of COVID-19 infections	-597 615	597 615	–
Total	-2 197 615	197 615	–

 

3.1        Programme 4:Property and Construction Industry Policy and Research

An amount ofR829 000 was revised downward from the initial allocated amount of R4 647 778 to assist the Department of Health with the identification and coordinating the preparedness of quarantine sites for COVID-19 the adjusted allocation was used to provide additional beds as part of the response to the pandemic by hiring hotel accommodation and repairing state-owned accommodation at Salvokop and Pretoria West College.

 

3.2        Programme 3: Extended Public Works Programme (EPWP)

An amount ofR771 000 was revised downward from the initially allocated amount of R2 717 463 to recruit 45 445 beneficiariesacross different provinces to help clean and sanitise schools.

 

3.3        Programme 4:Property and Construction Industry Policy and Research

An amount of R597 615 was madeas a virement to quarantine South Africans returning from foreign countries and for the detection of COVID-19infections.

 

The effect to the initially allocated budget for the DPWI in Budget Vote 13 was zero as the Department's allocation of R8. 07 billion remained unchanged.

 

4.         OBSERVATIONS AND FINDINGS

The reprioritised funds were to ensure accommodation services to the Department of Health (DoH) and the Department of Home Affairs (DoHA). The DPWI usually claims such funds back as management fees from the DoH and DoHA.

 

1.  

Having considered the programmatic amendments made to the allocations for 2020/21, the committee recommends that the Minister of Public Works and Infrastructure:

• Ensures that the internal audit of the department have capacity to deal with fraudulent activities in relation to the procurement of Covid-19 pandemic goods and services; and
• Provides the committee with the report on the impact of the 45 445 EPWP participants recruited to clean and sanitise schools.

 

6.         CONCLUSION

The Select Committee on Transport, Public Service and Administration, Public Works and Infrastructure noted and welcomed the reprioritization of funds and reasons as outlined, and presents this report to the Council for consideration.

[The DA reserved its position on the report and abstained. The EFF objected to the report.]

 

Report to be considered.

 

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[1]Section 43 of the PFMA, read together with Treasury regulation 6.3 and section 5 of the Appropriation Act (2020), sets out the parameters within which virements may take place.