ATC200715: Report of the Portfolio Committee on Public Works and Infrastructure on the Adjustments made within the Budgetary Allocation of Vote 13: Public Works and Infrastructure, dated 14 July 2020

Public Works and Infrastructure

REPORT OF THE PORTFOLIO COMMITTEE ON PUBLIC WORKS AND INFRASTRUCTURE ON THE ADJUSTMENTS MADE WITHIN THE BUDGETARY ALLOCATION OF VOTE 13: PUBLIC WORKS AND INFRASTRUCTURE, DATED 14 JULY 2020

 

The Portfolio Committee on Public Works and Infrastructure, having considered the adjustments made within Budget Vote 13: Public Works and Infrastructure, contained in the Adjustments Appropriation Bill [B 10 – 2020], reports as follows:

 

1. INTRODUCTION

This report is meant for the National Assembly to consider 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 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 clause of 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.

 

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

The 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,amongst others, the Department of Health (DoH), Home Affairs(DoHA), Basic Education (DBE), and Social Development (DSD).

The COVID-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.

These adjustments had to be made to financial allocations of specific programmes in the initial budget allocation to the department.

 

3. ANALYSIS OF THE REVISED BUDGET ON EACH PROGRAM

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	2 197 615	–

 

1. Programme 4,Property and Construction Industry Policy and Research: R829 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 sitesfor 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;
2. Programme 3, EPWP: R 771 000 was revised downward from the initially allocated amount of R2 717 463to recruit 45 445 beneficiariesacross different provinces to help clean and sanitise schools;
3. Programme 4, Property and Construction Industry Policy and Research: R 597 615 as a virement to quarantine South Africans returning from foreign countries and for the detection of COVID-19 infections.

 

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.

 

 

 

 

 

1. OBSERVATIONS AND FINDINGS

 

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

 

1. RECOMMENDATIONS

 

The Committee recommends that the Minister of Public Works and Infrastructure:

• Ensures that the internal audit of the department has capacity to deal with fraudulent activities in relation to the procurement of COVID-19 pandemic goods and services.
• Provides the committee with the report on the impact of the 45 445 EPWP participants recruited to clean and sanitise schools.
• Submits the list of schools that have been decontaminated and sanitised to the Committee as soon as possible.
• Submits the list of quarantine sites across the country to the Committee as soon as possible.
• Provides an organogram of the new DPWI to the Committee as soon as it is ready.

 

CONCLUSION

The Portfolio Committee on Public Works noted the reprioritization of funds and reasons as outlined above, and presents the information to the National Assembly for consideration.

 

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.