Independent Development Trust Strategic Plan 2012

Meeting report

The Chairperson the Committee announced to Members that the term of the Board of the Independent Development Trust (IDT) had expired in February, and was extended to June.

Ms Pumla Radebe, Chairperson, IDT, tendered an apology for the absence of the Chief Executive Officer, who was out of the country.

Mr Vukani Mthintso, Acting Chief Executive Officer, IDT, stated that for the past two years, IDT’s main aim had been to bring people into the main stream of development in a particular area, to support and add value to the national development agenda, and to be the leading knowledge-based development agency. IDT would enable poor communities to access resources, recognise and unlock their own potential, and thereby continuously improve their quality of life.

Over the Medium Term Expenditure Framework (MTEF), IDT wanted to contribute to the realisation of  “an administration... that ..knows where people live, ...understands their needs, and respond faster”, as set out in the State of the Nation Address.  IDT advanced the social policy objective through the implementation of various programmes, mainly in the public sector. IDT also sought to contribute to organisational sustainability by ensuring that it received a 10^th consecutive unqualified audit.

IDT had two main strategic objectives, namely to empower marginalised and impoverished communities to develop in a way that was sustainable and achieved integrated social infrastructure. Mr Mthintso said he would return to this point later. Although the original targets had been to address 15% empowerment and 50% social infrastructure, the targets reached were 12,5% and 45,5% respectively, owing to limitations of funding.

IDT also sought to ensure effective and efficient administration and service delivery. Despite the challenges, IDT believed that it must continue to transform and deepen its delivery model.

At the end of the third quarter of the financial year 2011/12, IDT had achieved R2,9 billion expenditure in public mandated programmes (see page 4 of attached document for full details), which exceeded its achievements in the previous financial year. IDT believed that its targets were feasible. He noted that government priority areas included education, health and justice facilities, mostly crime prevention.

Slides of a project within the Expanded Public Works Programme (EPWP) were shown, to illustrate a working example of a farm that was exporting goods to Europe and other places. Integrated Development Planning applied not only to infrastructure projects, but also to ongoing people’s projects. IDT currently had 27 clients, was running 95 programmes and had over 2 000 projects that totalled R2,9 million in processed payments value (see slide 6 for further details).

IDT had a policy that infrastructure planning must be integrated with provincial plans. Mr Mthintso cited the example of a school to be built through IDT, which was locate on top of the mountain, with no access for construction vehicles, as the need for the school had been identified without the location being reflected in the Integrated Development Plan (IDP), and without reference to road availability. He stressed that Parliamentary committees should take time to ask questions about integration within IDPs.

IDT faced challenges in the current systems of payment after submission of invoices, since state departments were sometimes slow to pay, which had a negative impact on contractors, most of whom were small black-owned firms, and many of whom also had problems in issuing invoices.

Mr Mthintso noted that nowhere in the budget of any department or entity was there specific provision made for social facilitation. IDT saw this as a challenge, as it believed that social facilitation should be emphasised and made a part of the budgeting cycle. Over the years, IDT had to subsidise this part of the work, but lack of funding meant that structure would not be facilitated in the appropriate manner.

Mr Mthintso named another challenge as related to procurement and recruitment plans, citing the example of a hospital which had excellent facilities, but too few nurses. He added that world-class schools were also built, but there were no maintenance plans, and this meant that in three years IDT would have to go in again and refurbish the building. Procurement and recruitment did not form a part of most of the implementation agreements, but they should be reflected.

Mr Mthintso said that he could not over-emphasise the point about community involvement and identification, so that the community would not regard the new facility as merely another building, but would regard it as a new community asset.

Corporate Governance
Mr Mthintso outlined areas of corporate governance, noting that IDT had a full staff complement of 400 posts, but at the end of the third quarter there were 358 people holding posts. There had been 25 resignations at the end of December 2011, but 46 positions were now vacant. He believed that this was largely due to the uncertainty in the organisation and the transformation process, as well as a misconception that IDT was in crisis because of lack of funding. This was of concern to IDT. Without funding from the public sector, IDT’s business model was under threat and it may not be able to deliver as promised.

Slide 8 reflected the proposed structure, and he noted that IDT had adopted the principle that there had to be centres of excellence around partnerships and knowledge management. IDT also needed a flatter and more flexible structure, because the present structure was very bureaucratic, with provincial staff having to wait fro decisions from head office. IDT was also concerned about the span of control of the Chief Executive Officer, who currently had several reporting lines at different levels, which needed to be clarified. IDT also wished to strengthen governance, as without this, it would not achieve the necessary impact through its oversight, monitoring and evaluation. The structure now outlined reflected the principles in action, and a performance evaluation forum, monitoring evaluation committee, internal audit committee, tender adjudication committee and others were proposed. That structure was also taken down to the provincial level, with the ideal provincial structure outlined in slide 9.

Mr Mthintso then explained the current structure of IDT, saying that most of the staff fell into the categories between unskilled workers and specialist middle managers. In order to progress, IDT wanted to increase its specialist and technical skills, so that it would be able to be more responsive to the needs of South Africa. This process was not yet finalised. Resources had been put aside to skill the unskilled staff up to a technical level. The emphasis of IDT was on less management and more technical skills.

Development gap
Mr Mthintso talked about the “development gap in South Africa”. He summarised that government departments were trying to deliver services to the communities, but were doing so in a “latitudinal” way, without consulting each other, therefore not filling the gaps. IDT thought the same was happening with the donors and the private sector. Whilst non-governmental organisations (NGOs) and non-profit organisations were attempting to fill the gap by integrating services, they were not being successful. There was a need for a single nationwide agency to bridge the gap between government and communities, by facilitating, coordinating and integrating mechanisms. IDT noted that this would require three steps. Step 1 would involve the refinement of the mandate of entities delivering in the space, including IDT itself, the National Development Agency and others.  Step 2 would be for these agencies to refine their delivery mechanisms in the medium term. Step 3 would involve a determination of the best possible development model. This had been done in Brazil, where institutions were aligned towards a particular programme in a particular coordinated fashion. IDT believed that in the medium term, perhaps three years, there was scope for a review, and in five to ten years the national agency would be formed.

In light of this proposal, he said that IDT, in the medium term, should be a development agency that offered programme management, institutional support and community mobilisation. Those institutions that prompted development in communities should be given the capacity to deliver on the development mandate. Emphasis should be put on eradicating intergenerational poverty, especially among the rural poor, since rural poverty was one of the greatest challenges in South Africa. IDT should maintain its values of being people-centred, having integrity, professionalism, accountability and vision. IDT should prepare communities to receive, own, manage and sustain their own development. This would be achieved by delivering social infrastructure, which comprised of all the necessary measures, facilities and networks required for sustainable development in those communities.

Mr Mthintso elaborated on this, saying that IDT proposed to focus on three aspects of mobilising communities, supporting institutions and delivering programmes. The Head Office would work as a coordination centre, and implementation, in terms of strategy, structure and services, would be carried out in the regional provincial offices. Centres of excellence needed to be established, which would focus on sharing knowledge and building partnerships. Few institutions in South Africa were trying to breach the development gap between government and communities, but IDT believed that it was playing that role. It believed that partnerships with communities were vital, and 40% of its work would be directed to looking at the aspirations of communities, and support in delivery to the communities, whilst 30% would be directed to partnership with local government and local institutions, and 30% to managing infrastructure development.

Mr Mthintso tabled some slides, and noted that although the principles were not yet fully approved, there was a proposal that the IDT have four bands of management and Chief Executive Officer, middle management, skilled workers and semi-skilled workers.

Mr K Sithole (IFP) interrupted to state that Members did not have this proposal in front of them.

The Chairperson requested that copies of these two pages should be made.

Mr Mthintso apologised and promised to deliver copies, but emphasised again that this was merely a proposal at this stage, which he was outlining to initiate discussion. The IDT would be split into management and specialist areas, with the intention of protecting the specialists and the middle management. He tabled slide 51, setting out the issues with which the governance, human capital, partnership management and finance portfolios would deal. The five specialist teams would deal, respectively, with programme delivery, institutional support, community empowerment, knowledge management and institution management. The board of trustees would have secretarial, internal audit and Chief Executive Officer support offices. The regional managers would report directly to the Chief Executive Officer (CEO), and the CEO would do oversight over those regions, which was a new concept. This would result in a cut of staff at national level, but increments at regional level. IDT was unlikely, overall, to lose staff numbers. However, currently some skills were redundant, and others were not available, because some of the operations were moved from the national to regional level, and it may need to gain some new employees.

Funding
Mr Mthintso noted that when IDT was established in 1990, it was not intended to last for twenty years, and it was given R2 billion as short-term funding. IDT made less money from its investment income because of the Asian Tiger Crisis in the mid 1990s, and the recent global economic crisis, and it could be seen that IDT’s expenditure was gradually rising. IDT anticipated that it would be operating with a deficit of R2,4 billion, and had assumed that it would receive funds from the National Treasury.

IDT also assumed that it would be able to increase significantly the management fees, from the current 3% p to between 4% or 5%. However, IDT was dealing with public sector clients, who questioned why they should have to pay a state entity. The Committee could play a key role in clarifying this matter, and could also assist IDT by ensuring that IDT role was legislated. Since there was no enabling legislation for the IDT, there was also no obligation on the state to actually support the IDT. In the last discussion with the Committee in November 2011, there had been a decision that enabling legislation was necessary. Mr Mthintso said it would be very useful for this Committee to lobby for IDT to be given funding, at the National Treasury, and for collaboration to be established with the Technical Assistance Unit (TAU) at the National Treasury.

There were assumptions that IDT could promote public private partnerships, and might have access to other sources of funding, such as donor funds, or the National Lotteries Distribution Fund. In the absence of any approved National Treasury funds, IDT had come up with “survivalist” plans. The plan it had presented last year was set out as slide 2 on page 15 of the attached presentation; this had anticipated an allocation of funds in the amount of R300 million, but this was adjusted when funding was not forthcoming. IDT had now projected delivery on its programmes sooner than originally anticipated, and with an increase in management fees, to boost the income. However, clients could refuse to pay the new management fees and demand that IDT perform against old fees. If employment costs were reduced, this would compromise delivery.

It was anticipated that IDT would have about R2 million in the 2014/15 financial year, assuming it was able to raise business at or above the projected management fees. However, the Auditor-General may well make comments on its status as a going concern, and that in turn would lead to loss of confidence by its clients, and a possible challenge to the existence of the IDT. IDT had calculated that it might lose 130 employees over the next two years, and would have to replace them to keep the staff complement at around 400. There would also be a drastic reduction in resources invested in community development, a major downscaling of the community driven initiatives and dropping of the institutional support and community development oriented targets. At a national level, IDT would not be able to support institutions such as South African Women in Dialogue (SAWID) and South African Women in Construction (SAWIC). At a local level, IDT would not be able to support the training of the cooperatives. IDT might also have to downscale the initiatives that currently led to its positioning as the leading knowledge based development agency.
 
Mr Mthintso referred to the full corporate business plan for 2012 to 2016, which was set out on page 81 of the Corporate Plan document (attached), to illustrate the differences between IDT’s projections from the previous year, and what had actually transpired. He emphasised that in future, IDT must focus on monitoring and evaluation, but the funding limitations meant that it could only begin to evaluate in years 4 and 5. This would have implications on the quality of reporting and accountability. The resources to be leveraged would only start in years two and three, and not in the new financial year. Although IDT would ideally like to support twelve institutions, it could not currently support even one municipality. No institutional capacity building initiatives could be supported either. The number of new and replacement social infrastructure facilities that would be supported by IDT would be maintained at 300 (as set out on page 82 of the Corporate Plan).

Mr Mthintso said that the level of staff insecurity and uncertainty was high, although the Minister had committed to do everything in his power to get some allocations to IDT during the year to combat that uncertainty. IDT had already lost excellent talent, particularly at the technical skills level, owing to that uncertainty.

Legislative Analysis
Mr Mthintso said that previous discussions with the Committee had gone into some detail about the legislative imperatives and the present enabling environment. IDT had submitted a Business Case to National Treasury. It seemed that the Department of Public Works (DPW) was happy with the content of the Business Case. National Treasury was not entirely happy with IDT’s service delivery model, and preferred that IDT focus more on programme delivery than on institutional and community empowerment. This, however, was a policy debate, as to whether it was possible to drive programme delivery without involving communities and other institutions. The Business Case presented had not received any funding so far. This did not mean that IDT would cease to exist. The Business Case Document also identified the development gaps in South Africa, and part of the gap concerned the institutional arrangements or enabling environment of IDT.

Mr Mthintso noted that the Bill of Rights sought to unify first, second and third generation rights, although third-general rights were often neglected in the process. He believed that it was vital to mandate IDT, through legislation, to function in whatever form and shape the Minister, the Portfolio Committee and South Africa finally decided. Various options had been considered, including the current model of a trust, and that would be acceptable. IDT was governed by the Public Finance Management Act (PFMA) and was enjoined to government. In the long run, a trust may not be the most suitable option to drive public sector delivery in the manner and fashion that IDT wished. A non-profit company was also not desirable. The remaining schedules 2 and 3 both would require IDT to have enabling legislation, but either option was workable and would be acceptable to IDT. The Department of Public Service and Administration (DPSA) was of the view that IDT must focus on infrastructure programme management, and maintain the current structure, but preferably under a schedule 2 entity. If this option was adopted, IDT would not need funds from National Treasury because it could increase the management fees charged up to 10%. National Treasury had indicated a preference for a schedule 3 entity, which would contemplate both a raising of management fees and some Treasury allocations to drive IDT. He emphasised that there was no need to be fully Treasury-funded, since IDT could manage with 70% funding, and the rest being raised from management fees.

Mr Mthintso asked that the Committee approve IDT’s corporate plan.

Discussion
The Chairperson raised her concerns about the budget, as set out on slide 24, and expressed her opinion that IDT should stick to its original mandate.

Mr K Sithole (IFP) noted that the presentation given did not tally with the copy that Members had before them. For instance, a figure of 50% was noted for sustainable development on the hard copy, whereas 44,5% was noted in the powerpoint presentation, and 20% weighting was attached to effective and efficient administration in the hard copy, whereas 27,5 % was mentioned in the powerpoint presentation. There were also differences in the figures for planning and implementation. He asked why these figures diverged.

Mr Mthintso replied that the figures in the hard copy represented what the actual business case scenario included, i.e. what would have been ideal to have, if the funding was available. However, due to the lack of funding, only the figures announced in the Power Point presentations were reached. Mr Mthintso apologized for the confusion.

Mr Sithole asked how many schools were built by IDT and in which provinces.

Mr Sithole wanted to know how many invoices IDT had not paid to contractors.

Mr Mthintso replied that IDT made no less than 200 payments, but asked for clarification as to the type of payments that were of interest to Mr Sithole.
 
Ms Kholofelo Mashego, Assistant Chief Financial Officer, IDT, added that IDT was processing 800 invoices on a monthly basis, and approximately 200 on a weekly basis.

Mr M Swathe (DA) sought clarification as to what Mr Mthintso had meant when he said that, after having built schools and hospitals, there was found to be lack of proper management and human resources. He asked if IDT did not come to agreement with the relevant departments as to how they would utilise the buildings, before IDT built them.

Mr Mthintso stressed that IDT did not have the power of an implementing agent, simply because it lacked legislative powers. IDT therefore did not have the power to advise or instruct the Department of Basic Education or any other department on what it should do, but merely had to deliver what it was told to deliver. Although it might be aware that there was no road, it could not insist that a road must firstly be built.  This was the main issue around the need to have an enabling environment for IDT to function, and to be able to bring integrated services to the communities. IDT had done research on its own, using its own resources, and had identified that there was a need to undertake planning of staff as the hospital was being constructed. However, IDT could not influence the decisions of the various departments.

Mr Swathe noted that IDT wanted to change its structure from a vertical to a horizontal one, but asked why IDT believed that the new structure would be more effective, and whether any research had been done into the relative merits of each.

Mr Mthintso assured him that the changing of the structure was well researched, that international benchmarking had been done, and field trips to Tunisia and Chile had been undertaken. IDT had also looked at institutions in Brazil, and the previous Minister had taken IDT members to research institutions in India.  Benchmarking at a national level had also taken place, through a comparative assessment of 33 institutions.

Mr Swathe believed that taking powers from the Chief Executive Officer and giving them to the regional heads might affect morale, and wondered why IDT had referred to the new heads as “Regional CEO” rather than, for example, regional or senior managers.

Mr Mthintso said that the regional heads would not be Chief Executive Officers of the regions; he had used this term merely to explain that the head of the region would report on strategic matters directly to the Chief Executive Officer at national level. In the current set-up, a regional general manager would require approval from the Chief Executive Officer before being allowed to enter into agreement with a provincial Department of Education. This was despite the fact that the CEO might never have been to the region, and did not have the necessary expertise to decide what the region needed. IDT wanted to change this situation and ensure that a regional head could enter into a contract in the region, without prior approval from the CEO, so it was looking at delegation of responsibilities. IDT believed that it would be more effective, and have faster response times closer to the point of implementation. The operations portion of the tabled structure had not existed in the past in the regional office, but was now to be included. The idea was to devolve delivery closer to the people. IDT’s emphasis was now on community empowerment, as opposed to service delivery.

Ms C Madlopha (ANC) stated that there were indications of budget challenges. She was worried that, under the integrated social infrastructure, approximately 300 new and replacement infrastructure facilities were indicated, but wondered how IDT would achieve that mandate, given its financial challenges. At the moment,  the full mandate of DPW was not yet claimed back. One of the documents indicated that DPSA would be the institution to implement infrastructure, in partnership with Department of Basic Education. She further noted the loss of 49 staff members, and that fact that IDT had declared that it would not cease to exist, but wondered how it would be able to continue with its mandate. She also asked how IDT intended to fund the Resources Mobilisation Centre.
 
Mr Mthintso responded that IDT had estimated that it needed about R23 million to establish the National Resources Mobilisation Centre, over a three-year period. The Centre would work through people who would fund-raise on its behalf, although they would not be part of the structure, and would be paid a commission. This Centre would not bring any overhead costs to IDT, but it would bring the kind of revenue that IDT wanted. IDT did not want to report to the Committee in four years that it had not received funding from the National Treasury. It would rather report how much it had, and how this was raised. IDT believed that there were sufficient resources, comprising R4.5 billion in Corporate Social Investment budget and 0,7 % of gross domestic produce on Official Development Assistance.

Mr N Magubane (ANC) thanked IDT for the presentation. He noted that there were projects going directly to the people in the rural areas, but wanted to know if IDT monitored whether those projects were actually reaching the people, via the local government.

Mr Mthintso conceded that IDT’s weakest point was monitoring and evaluation. At the beginning of the presentation, he had introduced five principles that IDT was trying to integrate, of which one was impact assessment. This would enable IDT to know that the right amount of money was going to the right community in the right volume and was making the right impact.

Mr Magubane asked if IDT was receiving funds from the Department of Basic Education to build the schools, or whether it was using own funds, and wanted to know if IDT had received approval from the  Members of the Executive Councils (MECs) to build schools at a certain place.

Mr L Gaehler (UDM) commented that IDT’s original mandate was to deliver infrastructure – or to build schools - and that it had done very good job. The basic mandate of the Department of Basic Education, on the other hand, was education. This was why there was confusion when the Department of Public Service and Administration attended to the building of schools, which was not directly in its mandate. He felt that the Committee should do something about this, as it was overseeing the infrastructure. He urged IDT to stick to its original mandate, because it had been successful. He suggested that the Committee should take up the issue of funding, and should also hold discussions with the Portfolio Committee on Basic Education, about it taking over the mandate of public works. He concluded that skills and important contractors were being lost, because DPW was not attending to matters that fell within its mandate.

Mr Mthintso agreed with Mr Gaehler on the issue of mandate. He believed it would be important to have a discussion on the mandate, as was agreed during previous discussions in this Committee. The Minister had also made it clear that a priority was to ensure that the Department of Public Works was in a healthy position, as well as its entities. IDT was making efforts to reach that goal, both by assisting the Minister and possibly also by deploying some of its key staff to DPW. IDT believed that once the mandate around public works was clear, everything would be easier for IDT.

Ms N Madlala (ANC) suggested that the Committee should meet with IDT for a whole day in order to clarify all issues that had been raised, including the many proposals coming forward from National Treasury and other stakeholders, the new legislation mentioned by IDT, and policy implications.

Mr Mthintso agreed that it would be important to have more workshopping. However, he thought that other players needed to participate in the discussion, as suggested by Mr Gaehler. For example, the National Treasury needed to be asked why it had taken school development and the entire jobs fund to DPSA. Mr Mthintso was not saying that this was wrong, but it was important to understand the rationale behind those actions, in order to make informed decisions. Representatives of the DPSA were needed to explain the architecture and structure of the entire public service. There should be an overall discussion on what South Africa needed in order to move forward, and agreements should be reached.

Mr Madlala noted that ten projects were noted in regard to new refurbished social infrastructure, job creation, number of institution capacity building initiatives and municipality support programmes, but wanted to get a  breakdown of where this was happening, and in particular where new jobs were created.

Mr Mthintso replied that IDT could provide an exact list of the municipal support areas to the Committee. Broadly speaking, these were in provinces identified as priority areas, such as Limpopo Sekhukhune, which was reflective of the priority of the provincial strategy, as well as in areas that were named as national priorities, such as Alfred Nzo municipality, which was currently the poorest municipality in South Africa, and had the most numbers of vulnerable children. IDT could furbish a consolidated list of which municipality was supported, what type of support was given, and what kind of programme was planned.

The Chairperson remarked that IDT had said that it might lose 130 members of its staff, and wondered if this was an indication that they would be retrenched. She asked, if this were to happen, whether IDT would target the lower levels only, as she believed that this would not only be unfair, but the higher levels were no doubt taking up more of the funding. She asked whether retrenching would be good for IDT, and whether it was dealing with the problem of lack of funding.

Ms Radebe replied that during the meeting between IDT and the Committee in November 2011, a lot of advice was offered, and IDT had considered it thoroughly. In addition, there had been substantial engagement between IDT, the Department of Public Works and the Minister since November, which had contributed to IDT’s understanding.  Despite numerous discussions with the Minister, the long term sustainability of the IDT was not yet clear. IDT had not received funding from National Treasury, and in February the IDT Board had taken the brave decision not to try to obfuscate to Parliament and pretend that it did have funding. The corporate plan that was presented had set out clearly that the projected R300 million was not received. This was the reason that IDT called it a “survivalist” plan. The plan set out what IDT possessed, and the fact that it would be working within those confines. In addition, the Minister had issued a very clear message for a schedule 3 entity. The Chairperson also asked IDT to explain whether it received a grant from DPSA based on the number of people it had working under EPWPs. 

Because the funding was not received by IDT, IDT then had to consider whether all of its existing staff were  being used. If the answer was affirmative, IDT would fight to retain everyone. However, there might be duplications, and it was probably inevitable that certain staff members would be lost. IDT would not necessarily be in a position to continuously use the services of each employee. However, before making any retrenchments, IDT had an obligation to retain, redeploy, retire, re-develop and re-skill employees.

Mr Mthintso reiterated that it was anticipated that the overall staffing of IDT would remain at 400 members.  IDT would keep having 400 employees. He said that the Chairperson was correct in relation to the EPWP grant. However, with all available capacity, including what IDT had received as management fees, the set targets and human resource requirements, IDT could only have 400 jobs. If this were to change, in the event that IDT was permitted to charge greater management fees, or obtained new funding from the National Treasury, IDT would report back to the Committee on the changes and the implications on targets.

Ms Madlopha commented that the Committee was worried about the triple challenges of poverty, inequality and unemployment. Although IDT was implementing very well in regard to infrastructure, it was unsure as to funding. She suggested that the Committee should talk to the Minister on the issue of the mandate. She agreed with the comment of Mr Gaehler that the responsibility of the Department of Education was to educate. She agreed that a joint meeting be held of the relevant portfolio committees to understand the reasoning behind taking the mandate and giving it to the DPSA, leaving people with experience in public works without a job.  She noted that this plan should start being implemented in April 2012, in about one week, but there was no funding for it.

Mr Gaehler said that the issue of funding of IDT should be taken very seriously by the Committee because it was affecting service delivery. He wondered how IDT would make the people in the rural areas aware that there was assistance available for them. He condemned the building of a school where there was no road, or the building of two schools within one kilometre of each other, as those funds could have been used more usefully elsewhere. He assumed that it was a matter of making the Department of Basic Education aware of these matters, and he thought that this was a role that the new IDT could play.
 
Mr Mthintso said that IDT had several times successfully advised departments on what services they should offer, and how to do so, but not always had it been taken seriously. This was why an enabling piece of legislation was necessary. He noted that when IDT started to approach the schools in the Eastern Cape, IDT’s approach was to empower local contractors. However, IDT was told to use large contractors, which it believed was incorrect. When IDT avoided using larger contractors, the programme was taken away from IDT. He thought that the principle might be to the detriment of the organisation in the short term, but certainly would be for its good in the longer term.

He noted that partnership development was intrinsically linked to the communication machinery, and this would be used to let communities know of all existing services, not just IDT services, within government that would build partnerships between communities, and those at controlled and home resources.

A member of the Committee requested IDT to follow up on the comment on IDT’s use of public-private partnerships (PPPs).

Ms Mthintso replied that IDT was not going that way, although gaps had been noted, especially in the mining sector, that might be used for various reasons. The social labour plans of the mining sector were not responsive to community surroundings. The whole mining value chain had to be investigated, to make the surrounding communities involved in actual delivery. In the long term, the beneficiation of the products from the mines should be located within the communities. Hopefully, there would be no debate on nationalisation. This, however, was a different type of PPP arrangement.

Ms A Dreyer (DA) wanted IDT to clarify the points on self-sustainability. It would surely be unsustainable, from the start, if IDT were to dip into the capital base and start depleting that capital base.

Ms Madlopha asked IDT to indicate the approximate budget for the 300 new and replacement social infrastructures, and how would it fund them.

Ms Radebe said that in 2005 and 2006, IDT still had a lot of money left over from the original R2 billion allocation. At that time, IDT was involved with the community mandated projects and the infrastructure projects. At the same time, a debate with National Treasury was started in relation to the management fees, which, until that point, had not been raised.  National Treasury asked IDT whether it considered itself to be a financial institution, and whether its job was to look at investment, or to keep its money and apply its own resources into poverty eradication programmes. IDT made the decision to defend its involvement in the community driven projects. A good example was that IDT had made an allocation of R130 million to start the eradication of mud schools, then government followed with a further allocation of R3 billion. At that time, there was a debate, even within government itself, as to what should be done. When IDT was set up in the 1990s it was decided that it must use own resources to bring about change in the communities, but unfortunately, with the economic crisis came, IDT had to use some of its own money to assist some government programmes that were being implemented at that time.

Mr Mthintso said that when the integrated sustainability programme started, in 2000, Cabinet took the decision that IDT should be a coordinating mechanism, but it never allocated funding to actually drive that programme. In 2006, the decision was taken that IDT should play a role in driving the Accelerated and Shared Growth Initiative for South Africa (ASGISA). IDT was pressurised to become more active at a particular time. In general, schedule 2 entities were not expected to make any income. Since 2006, IDT had attempted to raise the management fees. However, it was not always the case that schedule 2 an entities would only receive one soft funding. A good example was the South African Broadcasting Corporation (SABC), who had not received funding for its commercial aspects, but who had received annual allocations for its public broadcasting services. He suggested that perhaps a 70% : 30% funding model would be more suitable for IDT, where public benefit parts would be financed by the state, and commercial aspects would be financed by the institution itself, and would be sustainable. It was a fundamental aspect for IDT that some development was not sustainable, but had to be done to answer a particular need in the community. Some projects could take as long as 30 years before they even started to become sustainable.

Ms Madlopha referred to the reference by IDT that the uncertainty about its position had led to staff resignations. However, page 8 of the presentation indicated that, in 24 cases, the contracts had expired. She did not think that a non-renewal of a contract was a matter of uncertainty. She asked whether those contracts that had been terminated due to ill-health of employees had resulted from the employees’ decision to resign, or if the IDT had asked them to leave.

Mr Mthintso explained that although the funds within the Expanded Public Works Programme were given on an annual basis, IDT had employees with five-year contracts. If the funding was uncertain, IDT tended not to renew those contracts when they ended. In addition, the agreement with the Cuban government, according to which IDT had 22 contract workers from Cuba, had come to an end. None of the employees were boarded due to ill health.
 
Ms Dreyer asked for confirmation of her understanding that IDT, through political pressure, ended up doing other things that were almost beyond its original mandate, and that had led to IDT depleting its capital resources. If this was so, it could be said that IDT was set up for failure by the politicians, for operational reasons.

Ms Radebe responded that there was never political pressure. ASGISA, and other strategies such as the eradication of mud schools, were all within the mandate of IDT, and involved a partnering with government and other organisations to change the lives of the different communities.

Mr Gaehler added that when IDT was asked to build schools, the contract would be between IDT and the service provider, so that IDT would be obliged to pay the contractor. This was the reason why some of IDT’s funds were depleted.

Other Committee business
The Chairperson noted that the next term would commence on 18 April and end on 27 June 2012. The agenda for 18 April and 25 April were agreed. It was indicated that the budget vote would take place around 4 May. It was noted that the Property Charter, which would be discussed on 22 May, had not been seen by the Committee.

The oversight visit to Limpopo from 27 May to 1 June was supported, pending approval. An oversight visit to Western Cape was planned between 17 June and 22 June.

Members adopted the second term programme.

Mr Gaehler proposed an additional meeting with the regional directors.

Ms Madlopha suggested that the Minister be asked whether he was ready to brief the Committee on progress.

Committee report on Free State Oversight Visit
The Chairperson asked Members to comment on the draft Report of the Committee (the Report).

Mr Sithole commented, in regard to point 4.1.1 (on page 3 in some versions, and page 4 in others) that there seemed to be a problem in classifying who had a disability.

Ms Madlopha pointed out that this had been explained.

Ms Madlala suggested that a sentence on page 4 should be rephrased. The province seemed to lack a common understanding on the definition of disabilities.

Mr Gaehler suggested that the findings should appear before the recommendations.

The Chairperson said that the whole of section 4, on page 3, related to the Committee findings.

Mr Gaehler said that it was not done in a manner corresponding to previous reports, because the recommendations should relate directly to the findings.

Ms A Busakwe, Committee Secretary, explained the structure of the report. She noted that section 3 was the summary, section 4 contained the Committee findings, section 5 included the conclusions based on the findings, and section 7 comprised the recommendations.

Ms Madlala agreed that there should be a consensus that would lead in to the recommendations section. Although this might follow a standard format, Members did not like it.

Mr Mabuza thought that the report did not specifically set out the findings made by the Committee when it visited the project.

Ms Madlopha made the point that when the Committee visited an area for purposes of oversight, it must make findings, and she thought that the draft Report did in fact cover all points.

Mr Gaehler suggested that comments should be distinguished more clearly from recommendations.

The Chairperson read out the directions for drafting Committee reports.

Members adopted the report.

The meeting was adjourned.