DEPARTMENT OF PUBLIC WORKS Portfolio Committee Presentation 7 th August 2012 Parliament of the...

DEPARTMENT OF PUBLIC DEPARTMENT OF PUBLIC WORKSWORKS

Portfolio Committee PresentationPortfolio Committee Presentation

77thth August 2012 August 2012Parliament of the Republic Parliament of the Republic

of South Africaof South Africa

1

Portfolio Committee Presentation 07 August 2012 2

1. Purpose

2. Overall Financial Performance

3. Overall Financial Performance per Programme

4. Budget Analysis per Branch

5. Earmarked Funds

6. Performance Information (Annexure)

7. Progress on Turnaround


Purpose of the Presentation by the Department of Public Works

-To update the Portfolio Committee on Public Works on the financial and Information performance of the Department of Public Works for the 1st Quarter of the financial year 2012/13.

Objective of the Portfolio Committee on Public Works

-To monitor financial spending in the department versus the roll-out of the departmental programmes

4Portfolio Committee Presentation

07 August 2012

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Linear Benchmark 25%

•Overall Allocation for the year = R7.99bn

•Expenditure as at Q1 = R2.17bn

•% spent Q1 2012 = 27% compared to Q1 2011 = 17%

ProgrammeBudget

Allocation2012/13

Exp 30 June

2012

% Spent as at 30

June2012

% Spent as at 30

June2011

R'000 R'000

Prog 1. Administration 893 ,978 233,279 26% 23%

Prog 2. Immovable Asset Management 5,364,043 1,578,034 29% 17%

Prog 3. Expanded Public Works Programme 1,659,000 317,354 19% 9%

Prog 4. Property and Construction Industry Policy Regulation

37,436 13,857 37% 32%

Prog 5. Auxiliary and Associated Services 39,339 26,891 68% 39%

Total 7,993,796 2,169,415 27% 17%

Portfolio Committee Presentation 07 August 2012

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Linear Benchmark 25% Economic classification

Budget Allocation2012/13

Exp 30 June

2012

% Spent as at 30

June2012

% Spent as at 30June2011

R'000 R'000

Compensation of employees 1,260,154 327,288 26% 23%

Goods and services 596,580 161,774 27% 17%

Office Accommodation 469,052 129,497 28% 23%

Transfers and subsidies 4,085,826 1,398,782 34% 19%

Infrastructure 1,484,742 146,290 10% 10%

Machinery and equipment 97,442 5,375 6% 9%

Total 7,993,796 2,169,415 27% 17%


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• Compensation of employees’ expenditure for the month ended 30 June 2012 is R327 million

• This expenditure is equivalent to 26 % for Q1 2012 compared to 23% of Q1 2011

• For Q1 2012: against the straight line guideline set at 25%

• Overall Compensation of Employees exceed the guidelines by 1% - (26%)• Programme 2 (IAM) also exceeded by 1% - (26%)• Programme 3 (EPWP) is at 25%• Programme 4 (Construction and Property Policy) is below by 12% - (13%)

•


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•Transfers and subsidies expenditure for the end of 30 June 2012 is R 1.3 billion

•This expenditure is equivalent to 34% of the allocation of R4 billion for the year

•Expenditure on transfers and subsidies include the following payments:

• R792 million payment to provinces for Devolution of Property Rates and Taxes Fund.

• R323 million for Augmentation of Property Management Trading Entity• R140 million for Non-State Sector

• R62 million for EPWP Integrated Grant to Provinces

• R54 million for Social Sector.


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• Infrastructure expenditure for the month ended June 2012 is R 146 million and expenditure is equivalent to 10% of the allocation of R 1.484 billion.

• Expenditure is far below (at 10%) the guideline and possible under spending is projected.

• Expenditure for machinery and equipment including intangible assets is R5.3 million and expenditure is equivalent to 6% of the total allocation of R97 million for Q1 2012


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Programme Allocation % Spent in Q1 2012 Programme 1 Programme 2 Programme 3 Programme 4 Programme 5


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Economic classificationBudget

Allocation2012/13

Exp 30 June

2012

% Spent as at

30 June2012

% Spent as at 30

June2011

R'000 R'000

Compensation of employees 198,017 51,195 26% 23%


Property Management 469,052 129,497 28% 23%

Transfers and subsidies 625 729 117% 0%

Machinery and equipment 25,073 1992 8% 35%

Total 893,978 233,279 26% 23%

Purpose:

Provide strategic leadership and support services, including the accommodation and overall management of the department.


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Internal Audit and Investigation Services

Intergovernmental Relations and Parliamentary Services

Strategic Management Unit

Monitoring and Evaluation

Overall Progress The overall progress of Internal Audit is satisfactory as they are achieving all the targets set out for them in Quarter 1.

Satisfactory progress Satisfactory progress Unsatisfactory

Highlights 19 Fraud Prevention Awareness workshops conducted against a Q1 target of 3

Achieve 5 of the 7 targets set for Q1 (71% achievement)

Achieve 100% for Q1 (i.e. 1 target on updating risk registers)

Only 1 target (of 3 targets) could be achieved – one-on-one engagements with business units to align performance reporting

Challenges/Recommendations

• Lack of cooperation from other branches

• Capacity constraints (headcount)

• May need to revise targets in future given the increase in the critical meetings

• Since this unit deals with Strategic Plans and APP, reporting takes place in the 2nd Quarter

• The nature of the other targets spans over a period and reporting on a quarterly basis poses a challenge

• Ensure effective performance reporting systems

• Capacity constraints (4 personnel)

Strategic Objective: Ensure effective corporate governance and sound resources management



Allocation2012/13

Exp 30 June

2012

% Spent as at

30 June2012


R'000 R'000



Transfers and subsidies 2,670,977 1,138,553 43% 19%

Infrastructure 1,484,742 146,290 10% 10%

Machinery and equipment 70,678 2,914 4% 6%

Total 5,364,043 1,578,034 29% 14%

Purpose:

Provide and manage government’s immovable property portfolio in support of government’s social, economic, functional and political objectives.

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Asset Register Portfolio Performance and Monitoring

Portfolio Analysis

Overall Progress There is some degree of progress – more work needs to done

Slow progress in the implementation of the C-AMP

Some progress made in the Lease Profile in three region (Durban, Port Elizabeth, Cape Town and Pretoria)

Highlights - Desk top completed21 448 land parcels verified through desktop analysis and updated with Deeds’ Web information

NO Progress - still in the process of revising the C-AMP framework 60% of leases reviewed


• Verification process to start • Refining of information is time consuming

• Lack of resources



Allocation2012/13

Exp 30 June

2012

% Spent as

at 30 June2012

% Spent as at 30

June2011

R'000 R'000



Transfers and subsidies 1,392,176 259,500 19% 13%

Machinery and equipment 1,567 458 29% 14%

Total 1,659,000 317,354 19% 13%

Purpose:

To ensure creation of work opportunities for the poor and unskilled people in South Africa by co-ordinating the implementation of the programme and providing overall strategic leadership across the three spheres of government.

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NYS Learners Support to Municipalities implementing projects

EPWP Work Opportunities across spheres of Gvnt reported to EPWP

Provincial Road Projects implemented and reported to EPWP

Overall Progress Fair progress Satisfactory progress against target for Q1

Progress will be measured once data has been validated

Highlights 847 learners recruited against a target of 1200 for Q1(71% achieved)

157 Municipalities out of a target of 120 for Q1 have reported on EPWP targets - (131% achievement)

Information yet to be validated. The EPWP system closed on the 20th of July and usually takes some time to validate data. Once data has been validated, will be reported to Parliament

78 130 Work Opportunities (reflected in the PMIS system but figure yet to be validated)


Actual progress attributed to delays in awarding projects

Differences in reporting cycles (National & Provincial) causing delays for DPW to report on performance information

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Allocation2012/13

Exp 30 June

2012

% Spent

as at 30 June2012

% Spent as at 30

June2011

R'000 R'000



Transfers and subsidies -

Machinery and equipment 124 11 9% 6%

Total 37,436 13,857 37% 32%

Purpose:

Promote the growth and transformation of the construction and property industries. Promote uniformity and best practice in construction and immovable asset management in the public sector.

Note: High % spent for goods and services


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Agrément SA Bill Built Environment Professionals

Expropriation Bill Developed policy framework to ensure environmental sustainability in the Construction and Property sectors through implementation of the Green Building Framework and related policies

Overall Progress

Unsatisfactory as this is characterised by delays and lack of planning

To be reported in Q2

Progress is slow

Highlights Draft Bill (Draft 8) submitted to DRDLR for comment and discussions held with DRDLR officials on draft Bill.

Draft TOR for service provider to assist DPW in development of Built Environment Green Economy Programme (BEGEP) developed


• Lack of proper planning resulting in delays

• Capacity constraints

• Lack of proper planning resulting in delays• Capacity constraints• Service Provider required


Goods and services - % spent for Q1 – 2012 is 49% compared to 42% of Q1 – 2011

•High expenditure under goods and services in programme four relate to state function for the funerals state events by the President.

•Expenditure was unforeseen and unavoidable and therefore additional funding to offset over spending will be requested during adjustment estimates.


Economic classification


Exp 30 June

2012

% Spent as at 30 June

2012

% Spent as at 30

June2011

R'000 R'000


Transfers and subsidies 22,048 - 0% 70%

Total 39,339 26,891 68% 39%

Purpose:

To provide for various services, including compensation for losses on the government assisted housing scheme and assistance to organisations for the preservation of national memorials. Meet the protocol responsibilities for state functions.

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Completed Construction Projects

Contracts/Projects Completion

Professional Skills Development for 100 graduates

Affirmable Business Enterprises ( specialists) access job Opportunities as Sub Contractors or Suppliers to Main Contractors

Overall Progress Some degree of progress

Satisfactory progress Possibly to be reported in Q2 as no awards of Major Contracts took place in Q1

Draft of Delegation Completed & Draft Turnaround Proposal Submitted; No service provider appointedHighlights 31 Projects Completed

against the target 50 for Q1 2012 (62% Achievement)

13 202 Jobs reported against the target 10 000 for Q1 2012 (132% Achievement)

86 Capital Projects on tender stage

Award expected in by end Q2


Area characterised by non-complying contract - Apply penalties to non- performing Contracts


07 August 2012

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Branches Compensation of Employees Goods & Services and Capital Payments

BudgetR’000

ExpR’000

%Spent

BudgetR’000

ExpR’000

% Spent

Minister and Support 8,558 1,669 20% 10,000 1,996 20%

Deputy. Minister and Support

0 0 0% 0 0 0%

Asset Management 28,217 9,250 33% 5,550 1,230 22%

EPWP 41,397 11,582 28% 148,257 29,890 20%

Projects 52,872 15,141 29% 12,630 1,726 14%

Policy Regulation 8,362 1,663 20% 9,770 2,280 23%

Inner City 6,609 1,747 26% 1,900 274 14%

KAM and Prestige 20,393 5,159 25% 2,700 336 12%

DG Direct Reports 36,706 9,970 27% 14,500 1,468 10%

COO and Direct Reports

11,769 2,095 18% 3,080 786 26%

Corporate Services 80,926 22,676 28% 82,065 24,798 30%

Regions 908,590 227,737 25% 156,700 38,244 24%

CFO 55,755 16,250 29% 21,700 8,408 39%

Branches Transfers (Household) Machinery and equipment

BudgetR’000

ExpR’000

%Spent

BudgetR’000

ExpR’000

% Spent

Minister and Support 10 - 0% 870 243 28%

Deputy. Minister and Support

Asset Management 0 0 0% 435 42 10%

EPWP 50 7 14% 1,567 284 18%

Projects 10 7 70% 865 236 27%

Policy Regulation 0 0 0% 160 11 7%

Inner City 80 79 100% 110 2 2%

KAM and Prestige 10 9 100% 576 22 4%

DG Direct Reports 0 0 0% 1,520 56 4%

COO and Direct Reports 0 0 0% 347 44 13%

Corporate Services 120 118 100% 27,119 1,164 4%

Regions 3,400 860 25% 39,240 2,778 7%

Finance and SCM 590 590 100% 4,747 408 9%24

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Branches Compensation of Employees Goods & Services and Capital Payments

BudgetR’000

ExpR’000

%Spent

BudgetR’000

ExpR’000

% Spent

Bloemfontein 81,795 18,786 23% 13,400 2,444 18%

Cape Town 171,140 42,136 24% 29,400 9,657 33%

Durban 121,669 32,116 26% 20,200 4,286 21%

Johannesburg 74,376 19,819 26% 9,350 1,092 12%

Kimberley 47,184 11,183 23% 10,300 1,681 16%

Mmabatho 51,807 12,983 25% 10,100 2,296 22%

Nelspriut 46,516 11,616 24% 10,300 2,081 20%

Polokwane 60,313 15,015 24% 10,200 2,081 20%

Port Elizabeth 76,125 18,986 25% 14,000 2,883 21%

Pretoria 139,200 35,557 25% 20,600 7,741 14%

Umthatha 38,465 9,534 24% 8,850 1,997 23%

TOTAL 908,590 227,737 25% 156,700 38,244 24%


• Regional Offices

• Allocation for Compensation of Employees is R908 million• 47.5% (or R432 009 million) of the of the total budget allocation towards

compensation is shared by three Regional Offices (Cape Town – 18.8%, Pretoria – 15.3% and Durban -13.4%)

• Overall Compensation of Employees expenditure for Q1 is 25% (in line with the straight line guideline set at 25%)

• Goods and Services

• Budget Allocation for the year is R156 700• 24% of the allocation spent in Q1 2012, Cape Town being the highest (33%)

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Branches Transfers : Household Machinery and Equipment

BudgetR’000

ExpR’000

%Spent

BudgetR’000

ExpR’000

% Spent

Bloemfontein 400 51 13% 1,450 96 7%

Cape Town 600 222 37% 11,750 354 3%

Durban 400 39 10% 2,800 510 18%

Johannesburg 200 135 68% 1,480 136 9%

Kimberley 300 0 1,100 124 11%

Mmabatho 150 0 1,300 230 18%

Nelspriut 150 0 760 130 17%

Polokwane 350 1 900 32 6%

Port Elizabeth 400 13 1,400 134 10%

Pretoria 400 397 99 15,500 911 6%

Umthatha 50 0 800 117 15%

TOTAL 3400 860 25% 39,240 2,778 7%


07 August 2012

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Function


Exp 30 June 2012

% Spent/Transfers as at 30 June

2012


Office Accommodation 469,052 129,497 18% 21%

DPW Infrastructure 1,484,742 146,290 10% 5%

CIDB 66,882 50%

CBE 27,438 13,719 50% 50%

Agrement Board 9,903 9,903 100% 100%

Boundary Fencing 7,000 0 0% 0%

Aug of PMTE 646,849 323,424 50 50%

Property Rates – Conditional Grants 1,918,659 792,353 41% 0%

EPWP Incentives to Provinces 292,761 61,581 21% 0%

EPWP Incentives to Municipalities 599,240 3,613 1% 1%

IDT Intermediaries 9,639 9,639 100% 100%

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Function


Exp 30 June 2012

% Spent/Transfers as at 30 June

2012


EPWP Incentives Non-State Sector 469,052 129,497 18% 21%

EPWP Social Sector to Provinces 217,401 54,350 25% 50%

Audit Fees: Financial Accounting 35,764 13,719 37% 50%

Asset Register 20,000 1,232 6% 0%


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Strategic Objective

Ensure effective corporate governance and sound resources management

Output Performance Indicator

Annual Target

Quarterly target (Q1)

Actual progress against target

Deviation Corrective measure Budget Supporting documents Allocation Expenditure

Internal Audit Plan

Internal Audit plan developed and approved annually by May

1 Internal Audit plan approved by May 2012 by Audit & Risk Management Committee

Approved Internal Audit Plan

Internal Audit Plan (Annual & Three Year Plan) approved by ARMC on 29 May 2012.

ARMC Agenda;

Draft Minutes (approved copy of Minutes only at next meeting in July)

Audit Plan Audit Reports

Internal Audit plan implemented ad Audit reports issued to WXCO and Audit and Risk Management Committee

9 Internal Audit reports issued quarterly to EXCO and Audit and Risk Management Committee

20% Audits executed and reports issued

13% Achieved; Details of Progress is as follows:

Completed Audit Projects:

a. SAS – Awaiting Presentation at EXCo & ARMC;

Draft Report

b. EPWP Compliance – Awaiting final Communication of Consolidated Report & Overall Comments

Serious delays experienced in securing Auditees (Snr/Executive Managers) to discuss overall project findings and responses for Corrective Action, despite follow up.

Ultimatum together with implications of non-submission of information and unavailability of Auditees were communicated, & only then was attention given to the report.

Draft Report

Audit Projects at Reporting Stage:

c. DoRA – Awaiting Management

Delays in receiving management responses despite

Matter escalated to Head of Property & Facilities Mgt, and

Draft Report


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Slogan - Sonke ◘ Kaofela ◘ Together


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1) Appointment of Support team members

• Little success since February 2012 (on 6 Core team members and 14 functional specialist)

2) Establishment of a Turnaround Unit

• Department for Public Service and Administration (DPSA) was approached in June 2012 for advice

3) Meetings held

• Workshop with Minister and DM – 3/4 July 2012- Workshop coordinated by DG , facilitated by TAU and report produced by Turnaround

Secretariat

• Extended Manco 20 July 2012

- Invited Manco to input into the turnaround and suggest ways to do things Differently, Quicker and Better

• Extended Manco – Strategic Plan of DPW - 25/26 July 2012

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Planned Meetings – further engagement and ownership

•Extended Manco – Annual Performance Plan - 20/21 August 2012

•Stake-holder Management meetings

•Branch and Units sessions

Some Initiatives

•Appointed Ilima Trust Property Management – to do scoping

•Tender to be issued (possibly 24th August) for the review of current leases from the 1st of April 2012. The appointed service provider to start on 1st of November 2012.


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Projects Identified (Progress in Some)

Project 1 Immovable Asset RegisterProject 2 Leases Project 3: Clean Audit Project 4 Regional SupportProject 5 Anti-Corruption CampaignProject 6 Re-opening of workshops Project 7 SCM ReviewProject 8 Governance and Performance Management Review – TAProjects 9 Compliance Review and EnforcementProject 10 Bills for ParliamentProject 11 ICRProject 12 HR - Building of Skills in DPWProject 13 LR - Employee Issues/GrievancesProject 14 Key Accounts Management (KAM) Project 15 Prestige Project 16 Head Quarters


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National Department of Public Works (NDPW)Head Office: Public WorksCGO BuildingCnr Bosman and MadibaPretoria CentralPrivate BagX65Pretoria0001Website: http://www.publicworks.gov.za

http://www.publicworks.gov.za/

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