R1605.APPB.RES

Preliminary Report: Departmental Presentations to the Joint Budget Committee on the Budget Expenditure

 

1. Department of Public Works

Building Classrooms and Hospital Revitalization Project

Summary

The Director-General of Public Works, Mr. James Maseko, presented before the committee that his department has no funding role in the building of schools infrastructure and Hospital Revitalisation Programme. Funding is through provincial equitable shares directly to provinces and conditional grants given directly to provinces or through the national Departments of Health and Education. The Department of Public Works’ role is to implement projects budgeted for by sector departments, that is it acts as an agency. Planning and delivery of classrooms has been complicated by migration of learners between provinces and schools within provinces. The national Departments of Public Works and Education are working together and have established the Infrastructure Delivery Improvement Programme to improve provincial education infrastructure delivery.

Institutional Arrangement and funding

The Department of Public Works does not budget or is allocated funds for building schools or hospital revitalisation. Sector departments such as Education and Health budget and plan for infrastructure expenditure and the Department of Public Works only implements these plans.

Currently, in some provinces Service Level Agreements are in place between the various provincial departments. Gauteng Province has its own public works section that does not use the national Department of Public Works, however, this is changing. In some provinces, e.g. Limpopo and Eastern Cape, the provincial departments of Education and Health use other implementation agents such as the Independent Development Trust (IDT) as a way of expediting delivery. The result of these varied arrangements is that there is a lot of finger pointing when there are problems.

The current funding arrangement between the Department of Public Works, Education and Health is that of transfer of budgets or cost recovery – where the department uses its own resources to deliver and claims back from the department.

Concerns were raised regarding the complex and confusing institutional (constitutional) arrangements, particularly relating to the roles of national and provincial departments.

Expenditure trends

National Treasury has released figures indicating under-expenditure on provincial capital budgets for 2004/2005 financial year. National Treasury still has to release the final provincial infrastructure expenditure figures for 2004/2005.

For education, in the past two financial years, the trend has been a slow expenditure of the budget for education infrastructure at the beginning of the financial year, but a marked increase of the expenditure in the last quarter of the financial year. Similar trends are experienced in health.

Although there are major issues that need to be resolved, under-expenditure in the past financial years has not been the most important problem affecting delivery.

Programme to improve delivery

A joint task team has been established between the national Departments of Education and Public Works to improve provincial education infrastructure delivery. This has led to the establishment of the Infrastructure Delivery Improvement Programme ( IDIP). The programme will address problems affecting delivery at the provincial level. The IDIP is coordinated by National Treasury and is being rolled out to all provincial Departments of Education, Health and Public Works.

A similar approach is being envisaged between the national Departments of Health and Public Works.

Planning and delivery

Planning for classrooms has been complicated by the migration of learners between provinces and schools within provinces, which has resulted in some schools being under-utilised and others overpopulated. It was highlighted that problems and solutions are not always infrastructure related but rather social

Delivery of classrooms has further been hampered by late submissions of plans by provincial Departments of Education to the provincial Departments of Public Works. This has resulted in further delays in tendering processes, which takes long and is a tedious process. Another problem include late payments of contractors by both Departments of Education and Public Works, as well as the inadequate management of contractors.

The national Department of Public Works pointed out that projects are handed out to provincial Departments of Public Works for implementation; the role of the national department is to ensure that national plans were properly implemented at the provincial level. The problem of paying contractors was recognised as a national one, affecting all government departments.

Other problems identified include:

It is hoped that the Infrastructure Delivery Improvement Programme will address these problems.

The following concerns were raised: concern regarding the proper planning for projects, whether sufficient information was made available for the proper planning. A question was raised whether the national Department of Public Works was supposed to have set standards for other departments, especially provincial departments. Furthermore, concerns were raised regarding the late payments and late submission of plans, which has affected service delivery. The issue of migration and long distance travelled by schoolchildren was highlighted.

 

2. Department of Land Affairs

Summary

The Chief Financial Officer, Ms C Choane, Department of Land Affairs, provided an overview of the department’s strategy and budget for 2005/06. The bulk of the 2005/06 budget would be channelled to the Land Restitution Programme. This comprises 69% of the budget over the Medium Term Expenditure Framework. This is in line with policy directives according to the MTBPS toward the finalisation of land restitution within three years.

To provide more substance to the above comments, the Chief Land Claims Commissioner, Mr T Gwanaya, described the progress made in land restitution, the measures to speed up the process and challenges faced by the Department.

Some of the issues that were raised by the Committee included the following:

Department of Land Affairs Briefing

In expanding on strategies to be utilised for 2005/06 within the framework for implementing land and agrarian reform, the following was noted:

In focusing specifically on land restitution, the following was highlighted:

In terms of the 2005/06 budget for restitution, the following was detailed:

The challenges, noted by the department comprised the following:

In conclusion, Mr Gwanaya maintained that whilst significant progress has been made towards the implementation of the land policy in South Africa, the following issues needed to be prioritised:

Issues Highlighted by Committee Members:

 

3. Department of Health

Hospital Revitalization Project

The presentation by the Department of Health focused on the Hospital Revitalization Grant, which is intended to provide strategic funding to enable provinces to plan, manage, modernize, rationalize and transform the infrastructure, health technology, organizational management and evaluations of hospitals so as to bring hospitals in line with national policy objectives. The Hospital Revitalization Programme did not entail the building of new hospitals but instead revitalized existing ones.

Expenditure

The total medium-term expenditure framework for the nine provinces increases from approximately R1 billion in 2005/ 2006 to R 1,2 billion in 2007/ 2008. Provinces are required to submit business cases so as to be included in the project. The National Department of Health appraises all business cases so as to ensure that the Strategic Plan of provinces is adhered to and size, location, cost, sustainability and level of service adheres to National Guidelines. The methodology of allocation was based on needs and the capacity of provinces to spend their allocations. The allocations are heavily dependent on the quality of information and prioritisation received from provinces.

Challenges

Three hospitals have been completed to date, 5 to be completed in the 2005/ 2006 period and 4 hospitals to be completed in the 2006/ 2007 period. The programme has faced with many challenges including:

Regarding the expenditure on the grant, KwaZulu-Natal requested that their allocation be taken back due to a problem with the provincial Department of Public Works. This challenge has been corrected. Extensive rollovers had affected the allocation for the next year. The Committee focused some attention on the oversight role of the National Department of Health. The National Department also acted as the source of funding. The committee called for budgetary control systems that measure delivery and quality – value for money.

The Department of health has created extensive capacity through the new Project Management Unit to deal with the Hospital Revitalization Project. It was reported that the completion of the Hospital Revitalization Project would take approximately ten to twenty years for completion.