Report on the performance of the entities and the actions from the Auditor's General report: briefing by Department of Public Works
Meeting Summary
The four entities which the Department of Public Works monitored were established to deliver government functions. These included three entities that were listed in terms of the Public Finance Management Act: the Independent Development Trust (IDT) listed as a Schedule 2; Construction Industry Development Board (CIDB) listed as Schedule 3A; and the Council for Built Environment (CBE) listed as Schedule 3A. The fourth public entity was governed by the ministerial delegation and was known as Agrément South Africa. The Department was empowered by the Public Finance Management Act (PFMA) to create a culture of accountability, openness and transparency in public administration.DPW was assisting the Department of International Relations and Cooperation (DIRCO) to deliver embassies in Congo, Lesotho and Nigeria; this work was ongoing. DPW had partnered with the Department of Labour (DoL) in the development of The Health and Safety in Construction Accord.
The Council for Built Environment (CBE) had established a bursary scheme and had produced its first eight graduates in different built environment fields. The number looked small, but the delivery chain in the built environment was something that ministers were seized with. The number of graduates was low because the school system produced a low number of pupils geared towards studies in the field. The CBE had established a transparent candidacy program and workplace training for candidates, which would accelerate professional registration.
Key challenges were the slow pace of transformation in the built environment sector. There was poor representation of women and black people in the sector. Poor maths and science literacy levels contributed to the poor throughput rates from tertiary education.
All entities had received clean audit reports. All entities had matters of emphasis except for Agrément South Africa (ASA).
Members sought clarity on the transformation challenges in the built environment sector, and expressed disappointment that only eight out of a possible fifty-two recipients of the bursary scheme in the sector had graduated. Members also voiced concerns on the role of the Industrial Development Trust (IDT) and its apparent inability to complete projects. The CBE was described as toothless with no power to transform the built environment sector. Members said that if the entity required intervention by way of legislation then it should indicate as much.
Meeting report
Opening remarks The Chairperson reprimanded the Department of Public Works (DPW) for its habitual late submission of documents.Department of Public Works (DPW) presentation
Ms Mandisa Fatyela, Chief Director of Strategic Management at DPW, explained that the four entities monitored by DPW were established to deliver government functions. The Department was empowered by the Public Finance Management Act (PFMA) to create a culture of accountability, openness and transparency in public administration. The Department monitored three entities that were listed in terms of the PFMA: the Independent Development Trust (IDT) listed as a Schedule 2; Construction Industry Development Board (CIDB) listed as Schedule 3A; and the Council for Built Environment (CBE) listed as Schedule 3A. The fourth public entity was governed by the ministerial delegation and was known as Agrément South Africa.
The oversight tool employed by the Department entailed the scheduling of quarterly meetings between the Executive Authority and the entities to review performance in the governance, financial management and performance management areas, thereby providing focused intervention when required.
The CBE had concurrent mandates for which the entity should develop policy frameworks to ensure consistency across the built environment professions. It had thus far developed eleven policy frameworks for implementation and alignment by professional councils:
• IDoW policy-2009/10
• Continuous Professional Development (CPD)
• Recognition of Prior Learning [RPL]
• Code of Conduct for professions
• Determination of professional fees
• Competency standards for registration
• Registration of built environment professionals
• Recognition of voluntary associations
• Appeals and tribunals
• International Agreements
• And accreditation of built environment programmes
The outstanding policy frameworks on Standard Generation Bodies and Recognition of New Professions and Categories were under review. The Green House Gas mitigation study, which was anchored on the Long Term Mitigation Strategy (LTMS) 2008 Cabinet decision and Kyoto Protocol obligations, was with the Department and was going to be used in compiling a comprehensive review of the green agenda. This would include enhancement and consideration of the appropriate time to report to Cabinet on implementing the LTMS decisions.
DPW was assisting the Department of International Relations and Cooperation (DIRCO) to deliver embassies in Congo, Lesotho and Nigeria; this work was ongoing. DPW had partnered with the Department of Labour (DoL) in the development of The Health and Safety in Construction Accord. The Accord was signed by the ministers of Labour and Public Works with federations like COSATU, FEDUSA and NACTU. In the context of the turnaround, the health and safety report of CBE would be used in strengthening contracting arrangements.
The research products on skills audit (2008) responses and the State of the Built Environment Professions Industry (2010), were used in the Inaugural Built Environment Professions Indaba of the Industry. The policy position recommendations were developed with transformation being the permeating backbone and various skills development initiatives were formulated.
The CBE had established a bursary scheme and had produced its first eight graduates in different built environment fields. Although eight seemed like a small number, the number of graduates was low because the school system produced a low number of pupils geared towards studies in the field. The delivery chain in the built environment was something that ministers were seized with.
The CBE had established workplace training and a transparent candidacy program for candidates. It was hoped that this would accelerate professional registration. There were also discussions with the Construction Education and Training Authority (CETA) for quality assurance of programmes, mentors and workplace training. The Council had re-introduced quantity surveying, construction management and landscape architecture academic programmes at the University of KwaZulu Natal (UKZN) and Durban University of Technology (DUT).
Ms Fatyela said that she had engaged the University of Cape Town (UCT) to seek clarity on why there were no black South African students registered at the engineering faculty. The response was that most black students enrolled with the faculty were foreign students. More focus would be given to the interventions at UKZN and DUT to ensure that the numbers of black students in the professions were increased.
A key challenge was the slow pace of transformation in the built environment sector. Women and black people were poorly represented in the sector. Poor maths and science literacy levels contributed to the poor throughput rates from tertiary education. The delivery constraints included the failure to fully cost the mandate of CBE. There were also funding constraints for the bursary scheme. There had been budget cuts; the National Treasury had taken R1 billion from the Department’s budget over the next Medium Term Expenditure Framework (MTEF) period.
Some of the findings highlighted by the Auditor General were achieved and some partially achieved.
Strategic planning and performance management was only partially achieved because the accounting authority did not submit the proposed strategic plan to the executive authority for approval at least six months before the start of the financial year. Secondly, the financial statements submitted for auditing were not prepared in accordance with the prescribed financial reporting framework as required by the PFMA. When it came to procurement, little things like submitting tax certificates had been flagged but could easily be resolved.
All entities had received clean audit reports. Except for ASA all had matters of emphasis. The Agency’s transactions were subject to the policies, procedures and governance processes of the Council for Scientific and Industrial Research (CSIR). The CSIR had received an unqualified audit report and had been hailed as an example of good financial management.
The Independent Development Trust (IDT) was regarded as a delivery arm of Government. The IDT generated a turnover of R6.9 billion against a target of R4.7 billion. Turnover referred to the value of programmes managed on behalf of government departments. About 24 567 work opportunities were created by the entity against the target of 24 000.
Areas of concern for the IDT included management fees; reluctance from departments to pay the IDT; and resource mobilisation. The latter was a challenge as there were issues of funding from the National Treasury. IDT needed to ensure that social facilitation capacity and capability was enhanced and dispatched, so as to support the developmental objectives of the state. Management fees were charged for delivery of programmes, but very little was generated from this as departments were reluctant to pay. The IDT did not have a mandate to insist on the management fees, and this probably needed to be enforceable by way of legislation.
Ms C Madlopha (ANC) sought clarity on this statement. She said her understanding was that once a contract had been entered into, departments had no option but to pay.
Mr Mziwonke Dlabantu, DPW Director General (DG), explained that at the point of signing the contracts some departments insisted on a lower percentage than they were required to pay. Contractual agreements were enforceable to the point that the contract had been signed, but when negotiating one could be asked to lower prices.
Mr L Gaehler (UDM) commented this issue had been addressed before, and that the IDT charged management fees of 4.5 percent. He asked if IDT management fees included fees for consultants. This was where the problem was because the consultants could just charge their own fees. He said this appeared to be double charging, and this could be the reason departments refused to pay.
Mr M Swathe (DA) also sought clarity on how the management fees worked.
Ms Thembi Nwedahutswu, IDT Chief Executive Officer (CEO), replied the 4.5 percent was an average fee that IDT had targeted for its own sustainability. The management fee had been introduced as a result of the financial challenges the IDT experienced. The 4.5 percent was an average amount that needed to be recovered at the end of the financial year. IDT had wanted to tighten the management fee as early as 2006. Contracts contained different levels of management fees that had been agreed with clients.
She said clients agreed to pay different management fees ranging from 1 to 5 percent, depending on the type of portfolio being implemented. The greater the input cost that the IDT incurred, the higher it negotiated. The value of the management fees was based on the negotiations held with clients and the type of the projects being implemented. The higher the projects, the lower the management fee, but the ultimate objective was to average 4.5 percent at the end of the year.
She also clarified the consultancy fee, and said this was gazetted and could go up to 18 percent, but did not include project management. This was just the professional cost of the architects and engineers. When one build infrastructure these were always the fees that had to be paid.
Mr Gaehler commented that Government departments should pay management fees, but should not pay much to build a project. Most of the money allocated for projects went to professional fees. The money should be going to the people.
Ms Madlopha asked what prevented the gazetting of the management fees, so that it was enforceable.
Ms Nwedahutswu responded that the fee could be negotiated. It had previously been found in court that the government was undercutting on consultants and thereby compromising the quality of the work. The role of the gazetted fee was the quality control of the buildings; so architects and engineers were needed to certify.
The Chairperson requested that the presentation be continued with.
Mr Gaehler commented that the fees to the consultants were too high. Government money should go to the people on the ground.
Ms Gugu Mazibuko, CEO of CBE, replied that professional fees were statutory fees regulated by an Act of law. The Act contained sections that talked about professionals and how such fees should be determined. The issue of the fees being too high needed to be taken up by the Committee, and had also been raised by the Competition Commission.
The Chairperson requested that the issue be reserved for a separate day. This issue would not be finished as the Committee was very concerned with the high fees. She requested that the DG find a date when the matter could be discussed. Although the IDT received a clean audit opinion, the AG report had cited internal control, leadership, financial reporting, and compliance as concerning.
Ms Fatyela said a total of 51 audit queries were raised during the 2011/12 financial year. The majority of these queries related to expenditure, management, non-compliance with laws and regulations and Governance issues. She said as of 31 December 2012 an average of 83 percent of the queries had been addressed. Emphasis would be placed on outstanding queries and enhancing controls in the last quarter.
The Minister had undertaken to resolve the short-term problems through reallocation of DPW funds to the IDT. R50 million had been allocated for the year 2013/14 with further allocations of the same amount for two more financial years. NT supported DPW in the review of the IDT’s business case, and the process was expected to be complete by end of June 2013. This matter was receiving priority attention, as the IDT was reliant on financial support from the Department in order to carry out its work.
The Chairperson sought clarity on whether NT was “supporting or agreeing” with the review of the IDT’s business case.
Ms Fatyela replied it was agreeing, and said the allocation came via the Department’s budget but it was ring-fenced for the IDT. This was not money that was just taken from the budget as that would be in contravention of the regulations. The business case would deal with funding and the mandate of the IDT. She said both NT’s and DPW deputy ministers were seized with the function of ensuring the business case came to being.
The Construction Industry Development Board (CIDB) achievements included amending regulations dealing with registers of contractors, and their subsequent publication for public comments. The CIDB facilitated the Construction Industry Transformation Summit, last year. The National Contractor Development Programme guidelines were also launched last year.
She said the AG findings pertained to, among others, irregular expenditure amounting to over R11 million. The supply chain management structure had since been enhanced. The supply chain function had been centralised and a checklist was developed to ensure that all processes were complied with.
Ms Fatyela said intervention on governance arrangements of CBE and their management of professional councils was intensified. Sustainability of IDT was receiving urgent attention. The policy on activating CIDB second register of built environment service providers needed to be revisited.
Discussion
Mr K Sithole (IFP) commented that there was nothing new in what the report contained. He said the bursary scheme was concerning especially that it only quoted a figure of only eight graduates without elaborating on how the matter would be resolved. He asked if there was any mechanism to raise the number of graduates.
Mr Sithole voiced disappointed at the phrase that was frequently used when it came to transformation: ‘slow paced’. Transformation was a challenge in all sectors in the country and there had to be means to ensure that it happened.
Ms Madlopha asked how CBE measured transformation in the sector. She asked if there were registration bottlenecks in the built environment sector. What were the challenges of not implementing plans that were there?
Ms Madlopha commented that there was an indication that three entities had not complied with the required NT regulations or the predetermined objectives. She asked what how entities would deal with the matter.
Ms Madlopha asked why the professional councils had not being fully costed, especially since that was listed as a service delivery constraint. What would the CBE be doing to rectify the challenge of not fully costing?
Ms N Ngcengwane wanted to know what was being done about the slow pace of transformation especially when it came to the representation of women at CBE. If CBE did nothing with the registration bottlenecks in the built environment, nothing would happen. Something had to be done even if meant an intervention by way of policy; CBE should indicate if it needed that kind of assistance. The Committee could not afford to be discussing the same issues for 18 years.
Ms Mazibuko replied that there were interventions with DPW on attracting and retaining technical skills for the public sector. CBE looked at technical capacity at municipalities and was currently doing assessment of municipalities on projects currently on the go, and what their Industrial Development Plans (IDPs) said.
The Chairperson interjected and said she had hoped the question on transformation would be answered based of the claim last year that there were courses being offered by historically disadvantaged universities which were not recognised in the field. It was stated last year that there was no uniform accreditation within council; some wrote exams and others did oral interviews. It was said that the universities could not overrule the six professional councils. CBE said the Built Environmental Professionals Bill (BEPB) was meant to deal with these issues. She said she expected a report on the issues raised last year.
Ms Ngcengwane commented that she had also expected that there be a report on the issues raised last year. Members could not complain forever; there had to be follow up. She said more information had to be availed on the structured candidacy programme, especially with regards to where the students were based. The tendency among officials had been to tell the Committee what it wanted to hear, only to realise later that it was not applicable on the ground.
Ms Ngcengwane wanted to know what the Construction Education and Training Agency (CETA) was doing if another institution would be founded to monitor workplaces.
Mr Gaehler commented that there was a problem with entities working in isolation. It was for the Department to work with IDT so that the graduate engineers were taken up. DPW should come up with a monitoring tool and work with other entities.
Ms Mazibuko replied that the accreditation of programmes had been done. There had been nine outstanding, but these had since been put on the CBE website with all the accredited institutions. There were accreditation visits looking at the status of the construction management academic programmes. The report would be submitted to the Committee so it could satisfy itself with the issues. The accreditation of programmes was being well handled. All the councils had signed the MOUs, despite the challenges. This was a work in progress. She said more information on the structured candidacy programme would be provided.
Ms Mazibuko clarified that the CETA was responsible for training. The Construction industry paid them the levies. For training that happened in the workplace, CETA had appointed CBE as a partner body to ensure quality in the workplace. But they also assisted with funding for CBE.
The Chairperson commented that it was indicated last time that there were four registration challenges. It was also raised that the field was a white man’s world, operated by old people who refused to retire or hand over. She asked what was being done about people who refused retirement. How would the entity unlock the registration challenges? Young professionals were roaming the streets because CBE failed to deal with the challenges.
Ms Ngcengwane commented that if there was a need for policy change CBE had to indicate that. The profession was too white, and change was hard to come by. Transformation had to happen, even if it meant Members doing it themselves.
Mr Sithole asked if there were timeframes on the proposal on the central bursary scheme or was this just a proposal with no timeframe?
Ms N November (ANC) wanted to know the whereabouts of the eight graduates. Were these graduates still in the system? If so, were they being nurtured? She asked for a provincial breakdown of where the graduates came from.
Ms November commented that the intervention on entities was not enough. The departments needed to indicate if government was winning. She asked if timeframes on projects were realistic and correctly aligned in such a way that would allow for effective monitoring. Members did not only seek to criticise but also claim the victories as well.
Mr Swathe wanted to know if the eight graduates came from different fields of the built environment. He wanted to know whether landscaping and aviation were taken into consideration especially since emphasis seemed to be on architecture and engineering. There were so many students who deserved funding and needed to be registered in the engineering field. Engineering was such a critical field if delivery was to happen. Were eight graduates enough or was there a plan to increase the number, he asked?
Mr N Magubane (ANC) commented that eight graduates were not enough. More students were needed in the field. He said the landscaping profession was another important field that only white people were interested in. The universities should get black student into their programmes.
Ms Mazibuko replied that she would group the issues under three categories – audit, funding and transformation – as they centred on the same things. She said the two things not met were the submissions of the strategic plans to the Department. Everyone progressing to the next phase of the supply chain management process had to submit all the required documents.
Mr Mazibuko replied that the issue surrounding costing of the six professional councils was the 2000 Act. The Act stipulated all the responsibilities of the professional councils. The challenge was that all six councils were self-funding and got nothing from NT. CBE was currently doing an exercise to cost the mandate. That should be finalised early in the coming 2014/15 financial year.
The CBE got no funding for the bursary scheme from NT. CBE agreed with the feeling that the eight graduates were too few but the truth was that the scheme started in 2009 and the original number of students enrolled was 52. Out of that the first group completed the courses in December.
Ms Mazibuko said that earlier sentiment at CBE had been to close down the bursary scheme because of a lack of funding from NT. This was decided against and a central bursary scheme was proposed. The view was to look at creative mechanisms to address funding, as the country was faced with a challenge. A central bursary scheme meant that the industry worked with government to ensure that the public and private sectors drew resources to CBE, where thousands would be attracted to study in the field. Large amounts of money were being spent on infrastructure roll out in the country; therefore the country should be able to support young people to study the discipline. CBE was up-scaling; it had a plan and this would be revealed at the 2013/14 annual performance plan (APP).
The Chairperson interjected and said she was interested only in South African children (the question was in part informed by an earlier point that only foreign black students were studying in the field).
Ms Mazibuko replied that this was intended for South African children. In the public sector, CBE had started looking at the kind of bursary schemes that were there. The focus had also been shifted to the private sector, especially those companies who were big spenders in the built environment. The idea was to consolidate and centralise that. Every student who wanted to study in the field would simply come to a central place and get assistance.
Mr Gaehler asked if the DPW entities assisted in the bursary scheme. He commented that there had to be conditions that companies, working with public works, ploughed money back into communities.
Ms Mazibuko said CBE was not just complaining about the slow pace but it had also packaged interventions that looked at the total value chain in the built environment. To produce an engineer one had to start at basic education. At schools level, CBE identified organisations that ran maths and science support programmes; one of such organisations was Kutloanong. This organisation worked with township students; and had produced students who got 100 percent for maths. Dr Maths was focussed in the rural schools in the Eastern Cape. CBE worked with those organisations and looked at broadening their programmes.
CBE had run career awareness campaigns and in the last quarter 600 schools were reached. Limpopo was targeted for career education. For tertiary education, support was provided to UKZN with the hope of reopening the faculty of quantity surveying, but also the DUT landscape architecture faculties. The two faculties would be opened next year.
Ms Mazibuko said CBE had a challenge with graduates who had to go through workplace training before they could be registered as fully-fledged professionals. This was a difficult area because candidate professionals claimed discrimination in the work place, doing menial jobs like collecting laundry, and generally being sidelined. As a measure, CBE was in the process of establishing a structured candidacy programme that would be accredited, quality assured and monitored. This was done with the Department of Higher Education and Construction CETA. This would help in terms of what happened in the workplace. There would be structures to independently monitor what happened in the work place and this would assist in monitoring the workplace.
Mr Swathe sought clarity on the irregular expenditure of R11 million. What happened and would the money be recovered? He asked if anyone had already been penalised as a result.
Ms Nwedahutswu replied that there were huge increases on audit queries but they were mainly focused on house-keeping. To mitigate this, information management officers had been deployed at regions to assist technicians with information. Quarterly reports detailed how the risks were being addressed. It was important to note the growth of the portfolio, particularly KwaZulu Natal, where most queries came from.This was the one province that could not afford to bulge on the management fee, but sadly IDT had a high turnover there.
Ms Hlengiwe Khumalo, Acting CEO of CIDB, replied that the action plan for the entity made mention of some of the interventions that were put in place. In the period 2011/12 the function of supply chain management was not centralised but done by units themselves. That had since changed; a turnaround strategy had been put in place.
She said not a cent in the R11 million was lost. The irregularities were of an administrative nature, such as tax clearance certificates, clerical errors on bids that were issued, or disregard for procedures and extending contracts without approval. The matters that had been raised were being dealt with. Management had submitted to the board for delegation and NT for condonement on issues of irregularity. These were receiving attention and CIDB was confident in the internal controls that had since been put in place.
Ms N Madlala (ANC) commented that she was not happy with NT cutting back by R1 billion in three years of the budget. She requested that more information be provided on the R1 billion cut. It was notable that only 28 percent of the built environment budget had been spent; she asked if it was feasible to use the remainder of the budget in the last quarter of the financial year.
Ms Fatyela replied that the cut in the budget and the impact it would have would be explained to Parliament when the Department came to account for the annual report.
Ms Ngcengwane asked how far the IDT business case with NT was. She also requested a list of those departments that were reluctant to pay.
Ms Nwedahutswu replied that the variance was large and that measures were being put in place. There were few assumptions, and there had been engagements with mining houses who wanted assistance on social facilitation. The mining houses needed help with the human settlement component of their operations. With the crises some of the projects could not go forward as planned. There had been a partnership with Lonmin and when Marikana came the process was delayed.
Ms Nwedahutswu replied that the list of departments that were reluctant to pay would be forwarded to Members.
Mr Gaehler sought clarity on how partnerships that the CBE had entered into addressed the issue of technical skills in municipalities. He sought clarity on how the Presidential Infrastructure Programme supported skills development.
Mr Gaehler commented that the country’s shortage of skills was alarmingly high, despite the fact that the professional councils were giving out bursaries. He said detailed information was required on the awarding of bursaries by the councils. It was clear the challenge with regards to these fields was at the poor maths and science results in schools, as alluded to by the presentation. The correctness of the statement had always been known, but the challenge was how this got addressed.
He commented that, as suggested before, it was important that the DG’s of DPW and Department of Basic Education (DBE) met. It had also been recommended previously to CBE to visit the poorest schools. He said he wondered if this was ever done. This would help poor children who might not even know that these professions existed. A solution had to found about poor maths and science; these were requisite subjects to be in the built environment field. If this was not addressed there would always be challenges.
Ms Nwedahutswu said IDT had met with the Deputy Minister as part of a task team that was put in place to fast-track funding. The process of the business case was classified into three phases. The short-term required some bridging finance for the IDT to continue. The medium and the long term looked into the mandate of the IDT and overall funding. Given the financial challenges that the entity faced, much focus had been on the short term, hence the R50 million for three consecutive years. The money was meant to address operational challenges for the entity.
The Chairperson asked if DPW was not contravening PFMA regulations by giving IDT funds, whilst it was a Schedule 2 entity. She said Schedule 2 entities were expected to generate their own funding. What had stopped the discussion between IDT, NT and DPW, so that it could become an entity that would look like others in the Department, such as CIDB? It had once been suggested that there was a standing order that the IDT got funds from the Department; what had stalled those discussions? Her understanding was that the R50 million that the entity would be receiving from DPW would be in contravention of NT regulations. She said the issue of how the IDT was funded had to be clarified.
Mr Dlabantu commented that the Chairperson had asked a question on something only she knew.
Ms Nwedahutswu said that there was no contravention of the PFMA if the Department funded the IDT. Legislation stipulated that when the IDT coffers ran dry the shareholder – DPW – needed to help the entity and provide financial assistance. The matter would soon be tabled before the Committee for consideration.
The Chairperson disagreed and argued that it was because of the work IDT did. The entity seemed to be lacking in carrying out its mandate. The IDT and Mvula Trust were the entities that dealt with infrastructure in SA; both specialised on building of schools and toilets. She said DPW needed to be honest if NT was a problem.
Mr Dlabantu commented that he was still unsure about the question. He said in the discussion of the business plan, the consideration of whether IDT needed to be Schedule 3A or Schedule 2 would be included. The discussion on the business case was reaching its end because the deputy ministers had been asked to look at specific issues so that they could advise on what needed to be done. It was anticipated that when the budget process came, the Department should be clear on the kind of recommendations that the deputy ministers’ interaction raised.
The Chairperson commented that there appeared to be no sense of urgency. Why was DPW treating the issue at a snail’s pace? She requested that Ms Fatyela respond as the DG was new in the portfolio.
Ms Fatyela replied that IDT had recently engaged the Deputy Minister on the matter. This had been in discussions for a while now and it needed to be finalised. In 2012 there was an issue with changing the IDT into a Schedule 3 and this was what had delayed the process. There were challenges with making that transition. The IDT was a delivery arm of the state, and such a transition would impact on delivery. Another issue that NT raised was cost structure.
Ms Nwedahutswu said that the pace had picked up within the departments (NT and DPW). A cap memo would drawn and would pronounce on the mandate and the scheduling of the IDT. It was important to note that on the executive could pronounce on this matter. She said whichever way the Entity was scheduled, the critical thing was to be the delivery arm of government.
The Chairperson reminded the officiasl that last year they had claimed that 46 staff members were lost by IDT because of a rumour that the entity was collapsing. She asked if the slow pace did not affect the IDT’s permanently and casually employed staff. Would mass resignations not impact on how the IDT functioned? The entity was the only hope for the provision of infrastructure and capital assets.
Ms Nwedahutswu replied that the question was critical, and there had been engagements with the DG. The entity was battling with the same frustrations as Members. IDT lost people and was unable to fill vacancies. There was a huge capacity requirement given the demand on the portfolio of the IDT. And the entity was unable to build that capacity. As a result the risk profile went up, and there were more audit queries and house-keeping matters. She said she agreed this impacted on delivery, but the DG had given an assurance that this was one matter that he would be driving.
The Chairperson sought clarity on the 94 projects that the Department claimed to have last year. If those projects were completed, the issue of mud schools would not be a problem in the Eastern Cape. In 2012 it was claimed that the projects would be completed by that point. How much progress had been made?
Ms Nwedahutswu replied that IDT even had new clients, and had delivered more than it had targeted. Implementation was where it had to be, but internal challenges remained. The entity was doing its utmost best to make sure the challenge was addressed. The IDT had thus appointed performance information officers to assist technicians and engineers with drawing performance information so that the risk was minimised and audit queries were addressed. A number of initiatives were in place, but personnel were highly stretched and would struggle to build the required capacity.
Mr Gaehler commented that IDT and DPW needed to stand ready to complete the mud schools that the Development Bank of SA was tasked with. He said those schools allocated to DBSA would soon be going out to tender. It was worrisome that established companies contracted to DBSA failed to complete the projects.
Mr Dlabantu commented that when making submissions for the MTEF some of the critical matters would be resolved. Failure to deal with the issue immediately would mean another year had been lost.
The Chairperson sought confirmation that in 2014, DPW would not be dealing with mud schools. She said the IDT had lost staff as a result of the delays, and requested that NT, IDT and DPW ensured they dealt with outstanding mud schools. It was now nearing winter and children would be affected; in March there were reports of children relieving themselves behind classrooms. Could the Department ensure that this did not happen next year?
She requested that the IDT be allowed to increase its workforce so as to quickly address the social infrastructural challenges.
Mr Gaehler commented that the amendment regulations of the CIDB were very good but were not implemented. When were grades being implemented?
Ms Khumalo replied that the regulations were submitted to the Minister for review and had since been approved. Management would be engaging with the board in the next week and was scheduling for implementation in the new financial year. This related to regulations in dealing with the registration of contractors that would deal with the state of development.
Ms Madlopha commented that the challenge was reclaiming the mandate, as DBE was responsible for the infrastructural budget, while DPW had to account for progress. The two departments should meet with NT and address the issue of budget for school building and upgrading.
Ms Fatyela replied that reclaiming the mandate was an issue that required political principals. She said she had met the DG of DBE last year, but DPW had since been mandated through the Presidential Coordinating Committee for Infrastructure (PICC). Eradication of mud schools was also one of the Apex priorities identified years ago. The only issue now was ensuring systems were in place for departments to deliver on this matter.
Ms Fatyela replied that they had been meeting with NT to indicate that budget allocation had to comply with Government Immovable Asset Management Act (GIAMA), just as departments were required to comply with the PFMA. The issue of user asset management plan was provided for in GIAMA. It did not help when departments went to NT for funding of capital projects, only to approach DPW when funding had been approved. The tendency had been that DPW would refuse to deliver on account of lacking resources, only for departments to come and claim in Parliament that DPW was failing to implement.
Ms Fatyela cited an example of R100 million that was ring-fenced for the Department of Home Affairs (DHA), for purposes of upgrading border posts. Although DPW had been constantly engaged with NT, it had not known about the allocation to DHA. When it was revealed, the question was who was going to spend the money, because in terms of planning DPW had to know two years in advance.
It had since been agreed that NT should give attention to the user asset management plans, and that such plans be submitted to NT on agreement with DPW. If the status qou remained and DPW was only involved at the end of the process, the money would not be spent.
Another session was mooted
Mr Gaehler said there were quite a lot of issues to be dealt with, and another session was required. He said the CBE was powerless and could not deal with consultants. People in the industry did as they pleased. CBE was a useless body that could not deal with its stakeholders. He asked the entity to state clearly the kind of assistance it needed from the Committee.
Ms Madlopha asked if CBE had the capacity to transform the industry. She said it was impossible to get responses; the Committee would spend a lot of time on the report, and yet nothing would happen. She asked who funded the organisations that worked with rural kids. If CBE could indicate in a report the names of the schools assisted; that would assist the Committee when on oversight. A separate session on the issues was needed.
The Chairperson ruled that the issue be closed, but on a note that said there was a need for an all day indaba. She asked about the status of the Built Environment Professional Bill (BEPB). The entities did not have teeth, and did not have control over the professionals. In 2012 the Committee was told that the Bill was in the pipeline; how long was that pipeline?
Mr Dlabantu replied that the Bill was work in progress.
Ms Fatyela replied that DPW would submit a report on the process that had been followed. The Deputy Minister conceded that this was a challenging Bill, and that there were delays that had been explained to the Committee.
Mr Dlabantu said the issue would be followed up.
Closing remarks
The Chairperson said transformation had to happen. All women in positions should ensure that they delivered on the responsibility given to them. There had to be follow up on all issues raised. The Committee wanted quarterly reports on the issues surrounding IDT and CBE.
The meeting was adjourned.
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