Updated 0n 14 January 2005

DEPARTMENT OF PUBLIC WORKS
Updated on 29 August 2005
ACTION PLAN FOR ADDRESSING SCOPA DRAFT RESOLUTIONS AND OTHER ISSUES RAISED BY SCOPA REGARDING THE 2003/04 ANNUAL REPORT

NO.	RESOLUTION/ MATTER ARISING	ACTIONS REQUIRED	STATUS AND/OR PROGRESS TO DATE
1.	General Observations The Committee wishes to commend the Accounting Officer for the progress made in a number of areas. However, the Committee is disappointed that certain matters remain unresolved, especially the completeness and accuracy of the state-owned property register. The Committee also wishes to express concern about the new matters dealt with during the hearing, especially the high number of vacant positions within the DPW.	Draw up Asset Register Action Plan, including proposals to increase the capacity of owner activities, initiate innovative ways of identifying unknown properties, and timeframes, roles and responsibilities	A plan to improve data on the Asset Register was drawn up and is currently being implemented. 60 young built environment professional people have been employed on contracts and allocated to regions to visit every property and verify asset register information.
1.		Produce updated recruitment plan, with priorities, targets and timeframes for reducing the percentages of vacancies in the department	The recruitment plan was approved by TMC in April 2005 and is being implemented. The vacancy rate has since been reduced to under 20%.
2.	Debtors The debtors system at the Department should be evaluated by the IT Section to determine whether the current system complies with all the needs of the DPW; and progress made regarding the weaknesses of the debtor system should be reported, on a quarterly basis, to the Audit Committee of the DPW, who should monitor and evaluate the progress in order to report thereon in the next annual report of the Department.	The system business rules must be developed further to ensure that there are proper controls within the system.	Changes to the debtors module have been made according to AG requirements, and were evaluated by Internal Audit for adequacy, and this matter was reported on the Audit Committee. Internal Audit identified further weaknesses, most of which have since been addressed, and some of which are currently being finalised.
2.		Develop and put in place a system or processes to improve debtor management and report to TMC and Regional Offices’ Branch Exco.	In response to this audit finding, reporting on debtor management was made a standing item on the Regions Branch Exco. However, despite this management action, recent audits have indicated that there are still problems with the management of debtors, and the department is going to appoint debt collectors per region by 30 October 2005 to address this issue. In addition, by the end of February 2006, the Property Management Support Section will produce a report on all 90+ days debtors indicating which are being dealt with by debt collectors, which are being dealt with by writing off, and which are being dealt with by the State Attorney. This report will be regularly updated and used as a management tool to ensure that all debtors are managed and accounted for and that all long outstanding debts are eventually dealt with via one of the three mechanisms. The Property Management Support report will be submitted to the CFO to reconcile against the debtor analysis.
3.	Revenue This matter relates to the payment of market-related rentals by essential services officials occupying state-owned housing. The Committee recommends that this matter be taken up by the Accounting Officer with the Department of Public Service and Administration as a matter of urgency and reported on to Parliament by the end of the current financial year as the Committee is convinced that the position with regard to official housing could be better managed.	Since this is a matter which is subject to the Public Service Bargaining Council, a letter needs to be sent to DG DPSA asking for the rental rates to be renegotiated for essential services personnel.	The DG of DPSA advised that the employer recently negotiated an increase in the rentals for State Housing in PSCBC Resolution 2 of 2004. In terms of the agreement, the rental is to be increased over a five-year period, equal to the value of the Housing Allowance payable. He therefore advised that such negotiations should not be reopened at this point in time.
4.	Asset Management The Accounting Officer urgently attends to the finalisation of a valuation model (for immovable assets). An action plan should be tabled at the next meeting of the Department's Audit Committee for review and comment to the Accounting Officer and the Minister. The Committee should report thereon in the next annual report of the Department.	Agreement needs to be reached with the Accountant General on a valuation model, and an action plan drawn up to implement such a model.	A meeting was held with the Accountant General (OAG) on 01 December ’04 wherein it was agreed that the OAG is not yet ready to implement accrual accounting. A further meeting was held with the OAG and the Auditor General on 26 January 2005 to agree on compulsory disclosure requirements to be observed by departments in preparing 2004/05 AFS. It was agreed that the immediate requirement for the disclosure of property values in the DPW Annual Financial Statement would be waived. It was also agreed that, in view of the cost implications of such a requirement, consideration ought to be given to the value to be derived by the State in enforcing such a requirement in future, and that an affordable valuation model should be identified. The OAG is currently considering possible valuation methodologies and will indicate its decisions in this regard to DPW in future.
5.	General and application controls - computer environment the Accounting Officer ensure the urgent finalisation of a proper disaster recovery plan; the Audit Committee evaluate the adequacy thereof and report thereon in the next annual report of the Department; and the Accounting Officer and Audit Committee review the relevance of the last risk assessment exercise, as well as the adequacy of the current risk management strategy, and report thereon in the next Annual Report	A disaster recovery plan must be finalised.	Disaster Recovery Plans (DRP) were put in place and related documents were submitted to Internal Audit (IA) for assessment and reporting to the Audit Committee. Internal Audit identified a few remaining weaknesses which have since been addressed.
6.	Property Management Information System (PMIS) An information system audit of the application controls within the PMIS, conducted by the Auditor-General, found that although some controls were in place, significant weaknesses existed in the general control environment as a whole. the Audit Committee evaluates the adequacy of corrective steps implemented, and report thereon in the next annual report of the Department. the Accounting Officer and the Executive Authority take cognisance that the responsibility for implementing basic controls such as these was the obligation of all accounting officers in terms of section 38 of the Public Finance Management Act, and that failure to effectively implement such controls constitutes financial misconduct.	Department to put in place the missing controls and Internal Audit to carry out a review to ensure that application controls are in place and report to the Audit Committee.	Changes to PMIS general controls were made and were assessed by Internal Audit, which reported on this matter to the Audit Committee. Internal Audit identified some remaining weaknesses, some of which have been addressed, and the remainder of which will be addressed by the end of September 2005.
6.
7.	Vacancies and skills development In view of the incorrect information contained on page 90 of the Annual Report, the Accounting Officer provides SCOPA and the Portfolio Committee on Public Works with a correct and updated skills development plan; and	Correct the HR tables in the Annual Report	The HR tables in the 2004 2005 Annual Report have been checked carefully and and the inaccuracies in the 2003 2004 annual report have been addressed.
	the Portfolio Committee on Public Works monitors progress with the filling of all vacancies, especially financially related vacancies, and specifically the critical top management positions such as the Deputy Director General: Extended Public Works Programme.	Fill vacant posts	The DDG: EPWP post has been filled. The post of DDG Asset Management has been re-advertised and short-listed. Interviews were held on 18 July 2005. Cabinet has just approved the filling of the DDG: Asset Management position.
	Details of how many staff in Finance have been on which training courses, and when, and the budget for these courses, over the past three years	Compile details	Done
		Submit details to SCOPA	Done
	Information on percentage of vacant posts in Finance	Compile details	Done
	Information on percentage of vacant posts in Finance	Submit details to SCOPA	Done
8.	Unauthorised expenditure The Accounting Officer, in future to ensure – better quality budget submissions to National Treasury; and	Submit better quality budget submissions to National Treasury	Done for 2004, to be continued in coming years.
	pro-active budgetary management as provided for in the PFMA to avoid over-expenditure.	Regular (quarterly) reviews of expenditure versus budget and reports to top management	The Department carries out quarterly expenditure versus budget reviews involving all managers, and carries out monthly expenditure versus budget reviews involving a core group of managers from head office.
	Regularise existing unauthorised expenditure resulting from over-expenditure in previous financial years	Regularise the unauthorised expenditure.	This issue was discussed with the Accountant General on 1 Dec 2004. It was agreed that DPW should simultaneously write to the Chair of SCOPA and the DDG: Budget Office in National Treasury with motivations for this unauthorized expenditure to be regularised. This was done.
9.	Fruitless and wasteful expenditure DPW ensure that all user-departments are contractually bound to carry the cost of any fruitless expenditure arising from early vacating of rented properties; and	A memo is to be sent to Regional Managers to claim monies spent on behalf of clients by 03 Dec’ 2004	Done
		A letter is to be drafted to Client Departments to reiterate that they will be held liable for payment of leases should they vacate any premises prior to the expiration of a lease agreement.	Done
	the Department expedites the implementation of user charges.	Develop a plan for implementing user charges	Proposals for introducing user chargers have been formulated and are currently awaiting final Treasury approval.
10.	Account balances the Committee recommends that National Treasury consult all national departments who are in the same position, and clearly indicate what is required for this long outstanding matter to be resolved; and	Clarify the matter with the Accountant General	A meeting was held with the Accountant General on 01 Dec, and it was agreed to expense these transactions in the financial statements of the current financial year. This has been done.
	the DPW continue its discussions with the Accountant-General in order to determine what more is required to resolve this matter.	Ditto	As this would result in increased Unauthorised Expenditure it was agreed that this should be reported to National Treasury and SCOPA by 17 December 2004. This was also done.
11.	Governance There is a reported lack of independent checks and management reviews within the DPW resulting in policies and procedures as implemented by management not being fully adhered to. a target date be set for the total independent functioning of the internal audit section throughout the Department;	Provide a short report for SCOPA demonstrating that adequate capacity exists within the Internal Audit function by 15 December 2005	A plan to capacitate the Internal Audit section was drawn up and has been implemented. Internal Audit now has improved capacity at head office and also has regional representation. However, due to the extent of the workload and the Department’s zero tolerance policy towards corruption, Internal Audit does appoint external auditors for some specific tasks.
	the Audit Committee should assess the feasibility of the target date, and monitor progress towards the final date agreed between the Audit Committee and the Accounting Officer; and	Submit report to audit committee	Done.
	the Audit Committee monitor management responses to the weaknesses reported in the audit management letters of the Auditor-General.	Action plan to be submitted to audit committee	This action plan was presented to the Audit committee meeting for review.
12.	Reconciliation of PMIS to BAS that DPW should perform regular reconciliation's (i.e. monthly) that will be reviewed by the Director-General on a quarterly basis; and	Quarterly reconciliations to be submitted to the DG for reviewing commencing with Dec ’04 reconciliations	Done on 15/02/2005 and quarterly thereafter.
	monitoring mechanisms should be in place to ensure proper reconciliation.	Monthly reconciliations to be signed off by the CFO as evidence of review of proper reconciliations	Done - every 15’th day of the month.
13.	Compliance to EPWP conditions in the Division of Revenue Act (DORA)	Submit report to Audit Committee on compliance to the DORA EPWP conditions	Done. The Department is complying to the EPWP conditions in the DORA. Guidelines for implementing EPWP infrastructure projects have been drawn up and agreed to by SALGA and National Treasury. DPW facilitated that the Local Government SETA pay for training of municipal officials (432 local government officials have been trained on the EPWP to date). DPW has also carried out a series of training workshops for provincial officials.
14.	Finalise plan for devolution of rates to provinces	Prepare plan and submit to Treasury	A plan was produced in this regard and agreed to by Treasury, and is currently being implemented. Provinces will take over the payment of municipal property rates on provincial properties from 1 April 2006.
15.	Obtain Minister’s approval for disposal plan approved by TMC and initiate disposals, particularly of vacant properties	Submit plan to Minister for implementing disposals	A disposal plan has been put in place and is currently being implemented. This plan involves the proactive identification of properties which are no longer required for service delivery and their disposal through an open public process.
15.		Submit plan to Minister for implementing disposals