Portfolio Committee on Public Works I Public Works I CGO I Pretoria South Africa Works because of Public Works Quarter 1 Report 2013/14 Portfolio Committee on Public Works 7th August 2013 Cape Town I Public Works I CGO I Pretoria

Layout Part A Performance Information Highlight/Achievement Challenges Some Corrective Measures Part B Financial Information DPW PMTE

Purpose Purpose of the Presentation by the Department of Public Works To reflect on the 1st Quarter performance and financial information of the Department of Public Works in the financial year 2013/14 in order for the Portfolio Committee to advise on improving performance Objective of the Portfolio Committee on Public Works To have an understanding and measure the 1st Quarter information and financial performance of the Department for the financial year 2013/14.

Methodology of Assessing the Quarterly Reports 3 Phase Approach as per the Approved Department’s Policy Framework For Monitoring, Reporting and Evaluation of Performance Information 2013 and M&E Toolkit Phase 1 (Data Collection & Compliance) – 12th July 2013 – Due date for submissions by units Phase 2 (Data Cleansing and Analysis) – 15th – 25th July 2013 Phase 3 (Accountability Process) – 29th – 2nd August 2013 Key Focus Adherence/Compliance to the Policy framework for monitoring, reporting and evaluation of performance information in the Department of Public Works (See Status Report) Effective use of the M&E toolkits to measure and judge progress (Actual versus Target) in order to learn, improve reporting, innovate and adapt to change Encourage the use of quality performance information for decision making and resource management Project the various related components of Performance Information (M&E System) - for example, the inputs, processes, activities, outputs, outcomes, and impacts that constitute projects, programmes, and services To test the appropriateness of the indicators To provide an assessment on the overall performance of the Department

Programme 1 Administration This programme serves to provide strategic leadership and support services, including for the accommodation needs and overall management of the Department of Public Works. It is responsive to meet strategic objective 6 of the Department of Public Works and has links with all four other departmental programmes.   Sub-Programmes Internal Audit and Investigation Services Strategic Management Unit Monitoring and Evaluation Intergovernmental Relations Finance and Supply Chain Management Corporate Services

Highlights/ Achievements – support services (Pages 5 – 28) Improvement in the Annual Performance Plans as result of broader management participation leading to ownership and better understanding Planning and the linkages between the APP and Strategic Plan – see page 8 Prioritisation of risk factors within the Department with the aim of redressing such risks – these high level risk elements are then narrowed into individual business risk registers in the following risk areas – strategy, people, processes and technology – see page 9 (See also Attached High Level Risk Document) Approved M&E policy establishes a framework within which the Department can monitor, report, evaluate its programmes and make publicly available quality performance information (as stipulated in the Strategic Plan and Annual Performance Plan) – see page 11 Institutional support provided to Provincial Departments of Public Works in the development of customised performance indicators – concurrent mandate as per the requirements of the framework for Managing Programme Performance Information (FMPPI-2007) and notwithstanding Schedule 4 of the Constitution – see page 12

Highlights/ Achievements – support services Well-coordinated governance and accountability meetings that sought to redress challenges facing the Department and these include well coordinated MinMec, MinTop, EXCO and Entities and the recording and follow-up on resolutions. For example, DPW Accountability EXCO addressing AGSA Audit findings– see pages 14 - 17 Draft SCM policy for improved procurement processes – some of the delays in executing activities have been linked to weak SCM process without guides, standards and procedures. In addition capacity constraints during high levels of demand for SCM processes. The Draft SCM Policy incorporates all applicable circulars and practice notes issues by the National Treasury and CIDB. Key Deliverables of the SMC include Finalisation of the SCM policy SCM Value Chain SCM Structure Training of SMC staff Demand Management Framework Acquisition Management Framework – see pages 18 - 20

Immovable Asset Management Programme 2 Immovable Asset Management  This programme is the largest programme of the Department of Public Works and appropriates at least 48 percent  of the departmental allocation budget. It provides and management government’s immovable property portfolio in support government social, economic, functional and political objectives. In line with the mandate of the Department of Public Works, this programme seeks to achieve the first four strategic objectives of the Department of Public Works   Sub-Programme Strategic Asset Investment Analysis Project and Professional Services Inner-City Regeneration Operations Management Key Accounts management Prestige Management  Finance to determine the figure

Strategic Asset Investment Analysis Asset register - ﴾Pages 30- 34﴿ The project is on track, although some delays were experienced in the procurement of a service provider owing largely to the magnitude of the programme, complexity and legacy of unresolved issues, a lack of guiding policies & frameworks Registered state land reconciliation completed some progress has been recorded. Registered state land reconciliation was completed for May 2013 downloads Desktop cleansing of IAR and portfolio of evidence for National Land is 80% completed. Reconciliation of provincial DPW and Human Settlements land parcels is 95% completed. Linking of improvements to land parcels has been completed. Formulation of capitalization policy is being updated for GRAP. Creation of repository in i.e. Works for cleansed IAR data to be placed has been completed for sign off by client before being migrated. Procurement of GIS tool for field data collection has been completed; the tool is being aligned to DPW GRAP requirements

Operations Management Leases - ﴾Pages 41- 50﴿ Completion of 2778 leases desktop review in an effort to address the leasing backlog. Again, despite difficult circumstances, progress has been made as evidenced below: The lease backlog was determined and the agreed criteria was: Month-to-month leases Leases that have expired Leases that were due to expire on 31 March 2013 2778 leases desktop review has been completed. 1316 were leases that required attention, revision or renewal. These were regarded as backlog leases. The standardised lease contract has been developed for approval and for use by all the regions

Other Achievements Under Programme 2 and 4 Completion of projects with a 6A status (about 90% completed) in the 1st Quarter. The projects have implications on the creation of job opportunities . This links to the achievement of outcomes 4, 5 and 6 – see page 35 Completed drafts of Precinct Development Plans for two precincts (West Capital and Paul Kruger) – this links to the Tshwane 2055 Growth and Development Strategy underpinned by four pillars namely sustainable development and infrastructure, equitable growth, social inclusivity and cohesion, and good governance. DPW assists in the planning for New government Estate and Government campuses – see page 38 Prestige Management has been centralised in the DG’s office to create executive control and visibility and also with an interim management structure Prestige UAMPs finalized for improved planning of Prestige accommodation – see pages 57 - 58 Completion of 1st Draft revision of Expropriation Bill based on public comments. The Bill seeks to support sustainable and equitable land reform process – see pages 62

Summary of highlights per Programme Pages 5-28 Programme 2 Pages 30-58 Programme 4 Pages 61-63 Programme 5 Pages 65 Internal Audit Internal Audit plan done – Plan identifies risk areas and focuses on reviewing adequacy and effectiveness of internal controls Strategic Asset Investment Analysis Registered state land reconciliation was completed for May 2013 downloads Policy Branch 1st Draft revision of Expropriation Bill based on public comments Auxiliary and Associated Services Provision of Infrastructure support for 5 planned Prestige Events SMU High-Level Risk Assessment of the Department mapping a strategy to mitigate these risks Project and Professional Services 37 Projects Completed achieved status 6A on WCS M&E Approved M&E Policy that seeks to place the practice of monitoring, reporting and evaluation within the Department to ensure effective responsibility and accountability Inner-City Regeneration Completed Draft Precinct Development Plans – provision of New Government Estate and Government Campuses – mixed uses within Government campuses

Summary of highlights per Programme Pages 5-28 Programme 2 Pages 30-58 Programme 4 Pages 61-63 Programme 5 Pages 65 HRM Draft HR plan – includes, inter alia, training and development, transfer of skills, recruitment and retention strategies Operations Management 2778 leases desktop review has been completed. 1316 were leases that required attention, revision or renewal IGR Governance Meetings for decisions and follow-up on resolutions Key Accounts management Signed 2 SLA's with identified user departments Finance and SCM Draft SCM policy and SCM Value Chain Prestige Management Prestige Clients' UAMPs finalised

Challenges/Delays and some Progress in the Department Acquisition of PMTE Building System - delayed Project spend is still low Delays in implementation of IDIP and this is central to planning for projects Definition of irregular expenditure receiving priority - consensus with National Treasury PMIS: Property Management Information System still a challenge

Some Progress in the Department in response to AG findings PMTE Business Case – going to Cabinet in September 2013 –will deal with the Related Party transactions. The Draft Related Policy is done. As of April 2013 Director-General delegated functions to PMTE: Interim arrangement for PMTE Analysis of irregular expenditure was done Appointment of ADDG: Corporate Services as part of stabilisation Capacity of Internal Audit Unit with the R10 million acquired through Turnaround assisting to in-source capacity Lease Commitment Policy and review and audit of lease agreements Draft Contingent Liability / Asset Policy Moveable asset audit completed Draft Capitalisation Policy completed Draft Policy on Trade and other Payables done Draft Pre-payment Policy done

Challenges with Performance Information Non-Achievement and or Partial achievement of targets are as a result of the following: Dependencies – Indicators (linked to targets) are structured in such a way that the output of one programme is an input into another programme. Delays in one will have a knock-on effect on the other. This also characterises the nature of the Department’s environment. These dependencies range from: Capacity and Capability in Priority, Core and Key Areas Dependency element is also reflected in the relationship between Head Office and Regional Offices where there are challenges with reporting structures (Responsibility versus Accountability) Absence of Foundational Policies – in many instances, there is an absence of policies, guidelines and standard operating procedures Challenges with the organisational Structure – structure often follows function and functions are interrelated and/or interdependent. Interrelated areas often find themselves running parallel leading to duplications and in the case of interdependency, some functions run in silos causing fragmentation in performance information

Some Corrective Measures Review of the organisational structure in conjunction with the business model Conclusion of projects charters and alignment to programmes of the Department Development of a structured reporting mechanism on performance information for Head Office and customised reporting template for Regional Offices Continuous feedback on the progress of the Departmental programmes - encouraging participatory planning, monitoring and reporting Development of a Service Delivery Improvement Plan lined to the APP and Business Processes of the Department - Setting standards in order to improve the quality of interventions Develop and maintain a Management Information System to serve as a comprehensive central database on all its programmes and projects and evaluations initiated at Public Works Promotion of the use of evaluation findings for the Department especially performance budget information – the link between Performance information and budget Implement and monitor the approved policies, guidelines and procedures

Financial Information Part B Financial Information DPW PMTE

Expenditure per Programme Expenditure per Branch Lay-Out Expenditure per Programme Expenditure per Branch Expenditure per Region Earmarked expenditure Turnaround expenditure

Economic classification Summary Expenditure per Economic Classification Economic classification Budget Allocation Exp. as at 30 June 2013 % Spent as at 30 June 2013 % Spent as at 30 June 2012 R'000  % Compensation of employees 1 468 242 356 145 24% 26% Goods and services 876 278 138 691 10% 27% Goods and services: Office Accommodation 504 900 0% 28% Transfers and subsidies 2 542 264 604 582 34% Infrastructure 676 206 86 816 13% Machinery and equipment 102 146 21 510 21% 6%   Total 6 170 036 1 20744 20%

Economic classification Summary Expenditure per Programme Economic classification Budget Allocation Exp. as at 30 June 2013 % Spent as at 30 June 2013 % Spent as at 30 June 2012 R'000   Prog 1. Administration 1 148 162 138 707 12% 26% Prog 2. Immovable Asset Management 2 984 045 528 852 18% 29% Prog 3. Expanded Public Works Programme 1 947 969 523 457 27% 19% Prog 4. Property and Construction Industry Policy Regulation 39 182 5 930 15% 37% Prog 5. Auxiliary and Associated Services 50 678 21 625 43% 68% Total 6 170 036 1 207 744 20%

Notes to the expenditure The overall expenditure for the department as at the end of June 2013 is R1.2 billion and expenditure is equivalent to 20% of the total allocation. Compensation of employees’ expenditure for the month ended June is R356 million and the amount spent is equivalent to 24% of the total allocation. Expenditure for compensation is in line with guide line of 25%. Future expenditure for Compensation is projected to increase higher than the guideline as advertised posts for professionals are being filled. Goods and Services expenditure for the month ended June is R141 million and expenditure is equivalent to 10% of the total allocation.

Notes to the expenditure Expenditure for transfers and subsidies for the end of June is R605 million and expenditure relates to funds transferred to: Infrastructure expenditure for the end of a June is R86 million and expenditure is equivalent to 13 % of the allocation of R 676 million Machinery and equipment expenditure for the end of June is R22 million and expenditure is equivalent to 21% of the total allocation of R102 million . Council for the Built Environment R19 million Commonwealth War Grave R18 million CIDB R36 million EPWP Non-state Sector R240 million EPWP Integrated Grant to Provinces R140 million and EPWP Social Sector R99 million Independent Development Trust R50 million

Economic classification Expenditure per programme – Economic Classification: Programme 1 Economic classification Budget Allocation Exp. as at 30 June 2013 % Spent as at 30 June 2013 % Spent as at 30 June 2012 R'000   Compensation of employees 227 403 56 464 25% 26% Goods and services 384 628 80 177 21% Goods and services: Office Accommodation 504 900 0% 28% Transfers and subsidies 1 156 388 34% 117% Machinery and equipment 30 075 1 733 6% 8% Total 1 148 162 138 762 12%

Notes to the expenditure The total expenditure for Programme 1 is R139 million and expenditure is equivalent to 12% of the allocation for the programme. Current payments Compensation of employees expenditure is R56 million and expenditure is equivalent to 25%. Expenditure is in line with the guideline of 25%. Goods and services expenditure for is R80 million and expenditure is equivalent to 20%. No expenditure for Goods and services under Office Accommodation Transfers and subsidies Transfers and services expenditure for R388 000 and expenditure is equivalent to 34% of the allocated budget of R1.1 million Payments for Capital Assets Machinery and equipment expenditure is R1.7 million and expenditure is equivalent to 6% of the allocated budget of R30 million.

Economic classification Expenditure per programme – Economic Classification: Programme 2 Economic classification Budget Allocation Exp. as at 30 June 2013 % Spent as at 30 June 2013 % Spent as at 30 June 2012 R'000   Compensation of employees 1 116 526 271 763 24% 26% Goods and services 266 925 36 006 14% 23% Transfers and subsidies 855 064 106 409 12% 43% Infrastructure 676 206 86 816 13% 10% Machinery and equipment 69 324 19 518 28% 4% Total 2 984 045 520 512 17% 29%

Notes to the expenditure The total expenditure for Programme 2 is R520 million and expenditure is equivalent to 17% of the allocation for the programme. Current payments Compensation of employees expenditure is R272 million and expenditure is equivalent to 24%. Goods and services expenditure is R36 million and expenditure is equivalent to 14%. Transfers and subsidies The total expenditure of R106 million for this item relates to the amount of CBE and CIDB and the expenditure is equivalent to 12% of the budgeted amount of R855 million. Payments for Capital Assets Infrastructure expenditure for the end of June 2013 is R87 million and expenditure is equivalent to 13% of the allocation of R676 million. Machinery and equipment expenditure is R20 million and expenditure is equivalent to 28% of the allocated budget of R69 million.

Economic classification Expenditure per programme – Economic Classification: Programme 3 Economic classification Budget Allocation Exp. as at 30 June 2013 % Spent as at 30 June 2013 % Spent as at 30 June 2012 R'000   Compensation of employees 111 002 25 699 23% 25% Goods and services 171 762 14 748 9% 19% Transfers and subsidies 1 662 583 480 229 29% Machinery and equipment 2 622 253 10% Total 1 947 969 520 929 27%

Notes to the expenditure Total expenditure for programme three is R521 million and against the budget of R1.9 billion which is 27% Current payments Compensation of employees for programme three is R26 million and expenditure is equivalent 23%. Expenditure for compensation of employees is within the guideline. Goods and services expenditure for the end of June is R15 million and expenditure is equivalent to 9% of the total allocation Transfers and subsidies Transfers expenditures is R480 million against the budget of R1.6 billion which is 29%. Expenditure for transfers and subsidies is in line with the payment schedule. Payment for Capital Assets Machinery and equipment expenditure for Programme 3 is R253 000 and expenditure is equivalent to 10% of the allocated budget of R2.6 million.

Economic classification Expenditure per programme – Economic Classification: Programme 4 Economic classification Budget Allocation Exp. as at 30 June 2013 % Spent as at 30 June 2013 % Spent as at 30 June 2012 R'000   Compensation of employees 13 311 2 219 17% 13% Goods and services 25 509 3 689 15% 49% Transfers and subsidies 200 1 1% 0% Machinery and equipment 125 6 5% 9% Total 39 182 5 915 37%

Notes to the expenditure Total expenditure for programme four is R5.9 million against the budget of R39 million which is equivalent to 15% of the allocated budget of R39 million. Current Payment Compensation of employees expenditure is R2.2 million and expenditure is equivalent to 17% of the total budget of R13 million. Goods and Services ‘s expenditure is for June R3.7 million and expenditure 15% . Transfers and subsidies Transfers and subsidies expenditure for the end of June is R1000 and expenditure is equivalent to 1% of the allocated budget of R200 000. Payment for capital Assets Expenditure for machinery and equipment R6000 and expenditure is equivalent to 5% of the allocated budget of R125 000.

Economic classification Expenditure per programme – Economic Classification: Programme 5 Economic classification Budget Allocation Exp. as at 31 June 2013 % Spent as at 30 June 2013 % Spent as at 30 June 2012 R'000   Goods and services 27 417 4 071 15% 156% Transfers and subsidies 23 261 17 555 75% 0% Total 50 678 21 626 43% 68%

Notes to the expenditure Total expenditure for programme four is R5.9 million against the budget of R39 million which is equivalent to 15% of the allocated budget of R39 million. Current Payment Goods and services expenditure for the end of June is R4 million and expenditure is equivalent to 15% of the allocated budget of R27 million. Transfers and subsidies Expenditure for transfers and subsidies is R17 million and expenditure relates to payment made for Commonwealth Wargrave. Transfers and subsides expenditure is equivalent to 75% of the allocation for transfers and subsidies.

Compensation of Employees Budget and expenditure per branch Branches Compensation of Employees Goods & Services   Budget Exp. % Exp % Spent R’000 Spent Minister and Support 9 482 2 039 22% 12 000 1 287 11% Deputy Minister and Support 5 000 1 093 4 500 575 13% Asset Management 40 675 10 092 25% 5 582 1 801 32% EPWP 49 706 11 919 24% 159 793 12 311 8% Projects and Professional Services 66 200 16 533 12 700 1 963 15% Policy Regulation 8 462 2 219 26% 7 770 3 687 47% Inner City Regenerations 7 250 1 651 23% 1 900 95 5% KAM and Prestige 30 400 5 204 17% 2 900 109 4% DG and Direct Reports 46 119 10 199 11 800 4 035 34% Regional Co –Ordination and Direct Reports 11 700 3 431 29% 5 620 398 7% Corporate Services 88 836 23 013 100 850 24 241 Regions 975 207 248 730 177 339 38 178 CFO 73 996 17 406 26 700 3 366

Budget and expenditure per branch Branches Household Machinery and Equip   Budget Exp. % Exp % Spent R’000 Spent Minister and Support 0% 1 450 7 1% Deputy Minister and Support 700 6 Asset Management 475 165 35% EPWP 150 2 2 672 89 3% Projects and Professional Services 12 10 83% 16 900 16 059 95% Policy Regulation 200 1 300 5 2% Inner City Regeneration 104 103 99% KAM and Prestige 55 100% 500 15 DG and Direct Reports 1 800 120 7% Regional Co –Ordination and Direct Report 4 11% Corporate Services 263 21 170 1 530 Regions 3 250 1 078 33% 36 030 3 383 9% CFO 53 63 119% 2 900 66

Compensation of Employees Summary Expenditure per Region - Budget and expenditure per branch Branches Compensation of Employees Goods & Services   Budget Exp. % Exp % Spent R’000 Spent Bloemfontein 84 136 21 041 25% 15 805 2 026 13% Cape Town 176 085 45 812 26% 34 347 8 322 24% Durban 124 079 31 884 21 105 6 011 28% Johannesburg 82 345 21 349 9 676 1 040 11% Kimberley 49 786 11 714 23% 10 624 1 643 15% Mmabatho 58 528 14 127 10 444 1 985 19% Nelspriut 53 132 12 975 10 895 1 553 14% Polokwane 68 543 17 125 10 534 1 787 17% Port Elizabeth 84 123 20 964 15 945 2 964 Pretoria 150 056 40 878 27% 28 422 9 416 33% Umthatha 44 394 10 855 9 542 1 425 TOTAL 975 207 248 730 177 339 38 178 22%

Budget and expenditure per branch Branches Household Machinery and Equip   Budget Exp. % Exp % Spent R’000 Spent Bloemfontein 150 63 42% 1 700 52 3% Cape Town 900 255 28% 11 150 772 6% Durban 500 224 45% 3 050 556 18% Johannesburg 300 91 30% 1 520 245 16% Kimberley 100 1 300 158 12% Mmabatho 1 290 142 11% Nelspriut 50 1 090 210 19% Polokwane 40 80% 1 100 74 7% Port Elizabeth 30 10% 1 650 274 Pretoria 800 372 47% 11 090 526 5% Umthatha 0% 370 34% TOTAL 3 250 1 078 33% 36 030 3 383 9%

Budget Expenditure as at 30 June 2013 % Spent Earmarked Budget and Expenditure   Budget Expenditure as at 30 June 2013 % Spent R`000 CIDB 72 316 36 180 50% CBE 37 959 18 979 IDT (Bridging finance) 50 000 100% Agrement Board 10 398 Parliamentary Village 8 198 0% Aug of PMTE 682 426 EPWP Incentives to Provinces 355 914 140 607 40% EPWP Incentives to Municipalities 610 674 EPWP (Non- State sector)Operation 438 281 240 267 55% EPWP Social Sector to Provinces 257 564 99 349 39%

Budget Expenditure as at 30 June 2013 % Spent Earmarked Budget and Expenditure   Budget Expenditure as at 30 June 2013 % Spent R`000 Office Accommodation 504 900 0% DPW Infrastructure 676 206 86 814 13% IDT Intermediaries 10 169 Audit Fees: Financial Accounting 40 260 14 368 36% Boundary Fencing 7 000 State Function 27 132 4 070 15% CETA 2 750 Common Wealth War Grave 20 510 17 555 86%

Turnaround Budget and Expenditure Project Name Classification Budget Allocation Expenditure Exp %   R`000 Special Project (SIU) Goods and services 43 843 0% Support Team 19 384 4 889 25% DG:National Treasury TAU 2 000 Internal Audit Tech Support 21 600 Finance & SCM Clean audit 77 500 19 197 SCM 9 000 Lease Review 5 000 Immovable Asset Register 28 836 Projects Management Support Compensation of employees 55 209 Tech Intervention 48 642 Limpopo Intervention 256 Billing and Accounting System Total 316 014 24 342 8%

Property Management Trading Entity (PMTE)

Financial Performance of the PMTE Budget Claimed to date Actual Received R’000 Revenue 7,784,398 1,847,973 1,319,502 State Accommodation Charges 3,850,640 962,660 847,403 Private Accommodation Charges 3,105,519 505,091 457,962 Management Fees (Municipal) 145,813 39,009 11,179 Augmentation 682,426 341,213 - Other 2,958 Expenditure 1,503,801 Cleaning & Gardening 37,307 Private Leases 800,911 Rehabilitation, Repair and Maintenance 655,357 Property Rates 9,631 Municipal Services (Arrears) 6 590 Deficit as at end of June 2013 -184 299 PMTE Bank Balance (Overdraft) (1,535,268)

Projected under / over Exp Expenditure Analysis of the PMTE   Allocation Expenditure % Exp % Exp 12/13 Projection Projected under / over Exp R'000 PMTE 7,784,398 1,503 801 19% 22% 8,283,001 -498,603 Cleaning and Gardening 235,000 37,307 16% 149,226 85,774 Leasing (Private owned) 3,105,519 800,911 26% 24% 3,203,644 -98,125 Maintenance 3,682,500 655,357 18% 4,166,971 -484,471 Planned 2,449,292 394,160 25% 2,730,064 -280,771 Rehabilitation 380,708 58,781 15% 30% 627,241 -246,534 Day-to-Day 852,500 202,417 20% 809,666 42,834 Municipal Services arrears - 6 0% Property Rates 761,379 9,631 1% 3% 762,564 -1,185 Current 663,949 8,445 2% Arrears 97,430 1,185 40% 98,615 Other 590 4%

Expenditure Analysis of the PMTE Expenditure trends are lower than the previous year Cleaning and Gardening and Planned Maintenance are lower than the guideline percentage of 25% According to the data on WCS, an over-expenditure of close to R 500 m can be expected. This is an over-projection as the system is not updated with realistic information. The system shows 492 projects with no allocation, but with projected cash flow of R 638 m If these projects are moved out to more realistic dates, the programme will reflect a possible under-expenditure Highest value of projects incorrectly programmed against PPM, Pretoria and Special & Major Projects Additional data analysis to follow on next slide Expenditure against Property Rates is in line with this time of the financial year.

Total number of projects: 2338 Planned Maintenance – Analysis of data Total number of projects: 2338 Projects with forced tender dates 13 PPM 5 (R 2,5 m) Projects in practical and final completion for longer than 12 mnths 249 Special & Major Projects 40 (R 62,8 m) Projects where cons fees exceed 18% of the contract value 476 Durban 71 (R 432 m) Reduction in projected expenditure due to postponement on bid and/or practical completion date on WCS - R 289 570m - R 89 030 m Cape Town - R 71 387 m

Accommodation Charges (State Owned) – Top 10 Clients Devolved Funds Invoiced Amount Received % Rec   Outstanding R'000 Defence 1,086,466 271,617 100% - SAPS 1,034,271 258,568 Correctional Services 952,866 238,217 218,538 92% 19,679 Justice 340,795 85,199 0% Water Affairs 88,419 22,105 Health (Civitas) 18,015 Agriculture, Forestry and Fisheries 65,285 16,321 Public Works 41,499 10,375 Labour 37,395 9,349 Home Affairs 31,826 7,956 Grand Total 3,678,822 937,720 822,468 88% 115,252

Accommodation Charges (State Owned) 88% of the amounts invoiced have already been received. (This represents 22% of the amount to be invoiced for the year). Second quarter invoices are currently being prepared and will be issued during July. 86% of the outstanding debt relates to the current year and is between 60 and 90 days. Various client departments have had reductions in their baselines which will negatively affect the PMTE budget, as the devolved amounts have been reduced and therefore also the PMTE revenue stream. National Treasury has granted approval for the billing of state-owned accommodation charges on the basis of devolved budgets for the 2013/14 financial period. This will have a positive impact on revenue as clients were resistant to pay the invoices for fear of irregular expenditure without itemized billing.

Accommodation Charges (Private) – Top 10 Clients Invoiced Amount Received % Rec Outstanding R'000 SA Police Service 191 911 112 242 58.49 79 668 Defence 43 362 624 1.44 42 738 Rural Development and Land Reform 26 768 2 563 9.58 24 204 Home Affairs 33 384 20 255 60.67 13 129 Water Affairs 25 923 14 641 56.48 11 282 Agriculture, Forestry and Fisheries 15 017 8 498 56.59 6 518 Correctional Services: Other 15 283 8 790 57.52 6 493 SASSA - Eastern Cape 8 972 4 716 52.57 4 255 DIRCO –Pan African Parliament 11 337 7 190 63.42 4 146 Tourism 15 864 12 730 80.25 3 133 Grand Total 387 825 192 254 49.57 195 571

Accommodation Charges (Private) Total Invoiced amount issued for current year is R 591m covering April 2013 and May 2013 only June 2013 Invoices were issued during July therefore do not form part of the issued invoices by end of June 2013 Total amount received is R 451m and 50% of it was paid towards prior year balances 38% of current invoices were paid at the end of the first Quarter of the Financial year. 19% of prior year balance was paid at the end of the first Quarter of the Financial year

Total Amount claimed (incl mgt fees) Municipal Services – Top 10 Clients Client Total PMIS Not claimed Total Amount claimed (incl mgt fees) Amount Received Man fee rec Outstanding R'000 South African Police Service 195 733 205 520 74 994 3 571 130 526 Defence and Military Veterans 179 925 2 804 185 976 110 176 5 246 75 800 Department of Public Works 60 861 63 904 Correctional Services 191 231 200 793 137 212 6 534 63 580 Justice and Constitutional Development 59 803 369 62 405 21 695 1 033 40 544 Agriculture 9 775 696 9 533 Arts and Culture 9 002 9 452 Home Affairs 11 189 1 11 748 4 858 231 6 890 Labour 8 919 9 365 3 147 150 6 218 Statistics SA 7 353 35 7 684 2 957 141 4 728 Grand Total 733 791 3 905 766 380 355 039 16 906 411 175

Municipal Services All the claims for April, May and June have been issued. Total claims issued for the current year amount to R780million including management fees. The top 10 clients account for 98% of the claims issued. 88% of the claims issued for April have been recovered. 49% of the claims issued for May have been recovered. R5.5m of the expenditure incurred during April, May and June has not been claimed due to the disputes that have been received from the client departments. This represent 0.71% of the total expenditure incurred.

PACE – Top 8 Clients Client Invoiced Amount Received % Rec Outstanding Public Works 68 102 40 933 60% 27 169 Arts and Culture 18 537 - Justice and Constitutional Dev 26 530 12 274 46% 14 255 Correctional Services 51 233 40 921 80% 10 312 Defence 2 097 Labour 440 23 5% 417 Rural Dev and Land Affairs 163 Agriculture, Forestry and Fisheries 72 Grand Total 167 176 94 152 56.32 73 024

PACE Recoveries Total Invoice amount issued for current year is R 279m covering April 2013 and May 2013 only (Only active 8 clients were taken into account) June 2013 Invoices were issued during July therefore do not form part of the issued invoices by end of June 2013 Total amount received is R 472m and 56% of it was paid towards prior year balances 74% of current year invoices were paid at the end of the first Quarter of the Financial year.

Clients Amount Claimed Amount received Outstanding Balance R'000 Recoverable CA - Top 5 Clients Clients Amount Claimed Amount received Outstanding Balance R'000 Defence 58 308 3 130 51 178 Government Printing 3 248 Home Affairs 24 National Prosecuting Authority 1 557 Parliament 385 SA Police Services 446 Grand Total 63 968 5 133 58 835

Recoverable CA A claim of R 10 752 421.99 of SA ARMY for the Month of May 2013 was not issued to the client because we are still waiting a separate PACE Report for refurbishment project. The total amount not claimed for SA ARMY which includes April 2013 claim is R 16 178 518.07 The client is refusing to pay SA ARMY claims because refurbishment projects are included in the same PACE Report for Decentralized projects Government Printers is disputing the total cost of their project (i.e. the opening balance and the new expenditure)

Debtors Age Analysis Current 30 Days 60 Days Total 2013/14 Prev Years Accommodation (State Owned) - 115,258 18,187 133,445 Accommodation (Private) 211,236 152,932 364,169 955,145 1,319,314 Municipal Services 273,961 126,199 33,944 434,104 245,382 679,486 PACE 59,424 13,600 73,024 -19,398 53,626 Recoverable: CA 56,463 2,372 58,835 414,311 473,146 601,084 295,103 149,202 1,045,390 1,613,627 2,659,017 % 23% 11% 6% 40% 60% 100%

Projected under / over Exp DPW Capital Budget   Allocation Expenditure % Exp % Exp 11/12 Projection Projected under / over Exp R'000 676,206 99,941 15% 8% 1,376,897 -700,691 Departmental 157,000 14,595 9% 7% 500,975 -343,975 Accessibility (Disabled) 25,000 2,393 10% 3% 34,433 -9,433 Dolomite Risk Mngmnt 116,000 5,728 5% 93,885 22,115 Land ports of Entry (BCOCC) 202,206 56,887 28% 347,339 -145,133 Prestige 106,000 15,165 14% 284,894 -178,894 ICR 70,000 5,173 68,724 1,276 Special Projects - 0% 34% 46,646 -46,646

DPW Capital The 2013/2014 allocations for Public Works have been approved on 4 July. A re-allocation will be done during July to align the allocations with cash flows. The overall expenditure for DPW is at 15% with a projected over expenditure of R 700 million. Departmental The expenditure for Departmental is very low at 9%. Port Elizabeth region projects expenditure of R 113 million but this includes the acquisition of Ocean View Terrace (projection R 96 million) for which a roll-over has been requested. The project with the biggest allocation is WCS 049065 - “Restoration of the old Magistrate Court, Pretoria” with an allocation of R 43.6 million and expenditure of R 2.1 million. Accessibility The expenditure for Accessibility is at 10%. There is a projected over expenditure of R 9.4 million. Pretoria is the region with the biggest allocation of R 6.2 million has only spent R 227 382. Dolomite The expenditure for Dolomite is very low at 5%. Special & Major Projects only spend an amount of R 2 498 813 for April to June out of an allocation of R 81.5 million. There is a total projected under expenditure of R 22.1 million.

DPW Capital Land ports of Entry (BCOCC) The expenditure for BCOCC is high at 28% with a projected over expenditure of R 145 million. The project with the biggest allocation is WCS 046024 - “Skilpadshek Border Post - Construction of main border post” with an allocation of R 64.5 million and expenditure of R 25.8 million. Inner City Regeneration The expenditure for Inner City Regeneration is very low at 7%. There is a projected under expenditure of R 1 275 777. The service with the biggest allocation is with Pretoria: WCS 044271 – “38 Church Square: Upgrading of building” with an allocation of R 43.8 million and expenditure of R 4.6 million. Prestige The expenditure for Prestige is very low at 14%. There is a projected over expenditure of R 178.8 million. The service with the biggest allocation is with Pretoria: WCS 045639 – “Bryntirion: Construction of outer boundary fence” with an allocation of R 11.1 million and expenditure of R 311 317.

Total number of projects: 609 DPW Capital – Analysis of data Total number of projects: 609 Projects with forced tender dates 52 Special and Major Projects 14 (R 47 627 m) Projects in practical and final completion for longer than 12 mnths 97 Umtata 26 (R9 912 m) Projects where cons fees exceed 18% of the contract value 141 Pretoria 32 (R 176 953 m) Reduction in projected expenditure due to postponement on bid and/or practical completion date on WCS - R 379 814 m KAM - R 208 579 m - R 101 491 m

Projected under / over Exp Client Capital Budget   Allocation Expenditure % Exp % Exp 10/11 Projection Projected under / over Exp R'000 Client Capital 2,206,388 328,043 15% 16% 2,526,385 -319,997 Agriculture, Forestry and Fishing 14,730 72 0.5% 32% 14,181 549 Arts & Culture 229,822 24,814 11% 14% 377,215 -147,392 Correctional Services 709,688 84,099 12% 21% 580,509 129,179 Defence and Military Veterans 24,505 2,260 9% 83% 27,811 -3,306 Health 152 - 0% 274 -122 Higher Education 4,000 1,603 2,397 Home Affairs 63,349 9,857 52,341 11,008 Justice 271,732 35,315 13% 358,427 -86,695 Labour 3,416 441 61% 14,604 -11,188 Rural Development 7,653 505 7% 46% 8,002 -349 SA Police Service 877,340 170,680 19% 1,091,419 -214,078

Client Capital All the clients have signed off on their 2013/2014 allocations except for Arts & Culture and Labour. Only allocations for committed projects for these clients were allocated on WCS. Agriculture, Forestry and Fishing: There was no expenditure for April and June and only R 72 314 for May. There is a total allocation of R 14.7 million with a projected under expenditure of R 548 575. The service with the biggest allocation of R 6 million is with Durban RO WCS 045521 – “Quarantine Station, Construction of building” with zero expenditure for April, May and June. Arts & Culture: The expenditure is at a very low 11%. There is a total projected over expenditure of R 147.3 million. The service with the biggest allocation of R 109 million is with Cape Town RO WCS 042528 – “SA Museum, Construction of storage structure” with expenditure of R 2.3 million. A re-allocation meeting was held and the client has now signed-off and WCS updated. Correctional Services: The expenditure is at a very low 12%. There is a total projected under expenditure of R 129.1 million. The service with the biggest allocation of R 90.5 million is with Nelspruit RO, WCS 044954 – “Standerton, Upgrading of Prison” with zero expenditure for April, May and June

Client Capital Defence: The expenditure is very low at 9%. There is a total projected over expenditure of R 3.3 million. The service with the biggest allocation of R 11.6 million is with Bloemfontein RO WCS 043520 – “3 Military Hospital, Upgrading of hospital” with zero expenditure for April, May and June. A re-allocation meeting was held and the client still has to sign off. Health: The client only funded one project to the amount of R 152 212. There is zero expenditure for April, May and June. Higher Education: The client only funded one project to the amount of R 4 million. There is zero expenditure for April, May and June. Home Affairs: The expenditure is very low at 16%. There is a total projected under expenditure of R 11 million. The service with the biggest allocation of R 17.9 million is with Bloemfontein RO WCS 044213 – “Regional Office, Construction of accommodation” with expenditure of R 163 469. A re-allocation meeting was held and the client has signed-off and WCS updated.

Client Capital Justice: The expenditure is at a low 13%. There is a total projected over expenditure of R 86.6 million. The service with the biggest allocation of R 74.8 million is with Johannesburg RO WCS 041546 – “Johannesburg High Court, Additional accommodation” with expenditure of R 11.9 million. A re-allocation meeting was held and the client still has to sign off. Labour: The expenditure is at a low 13% with a total projected over expenditure of R 11.1 million. The client did not sign off their allocation for 2013/2014. A Re-allocation meeting was held and the client still has to sign off. Rural Development and Land Reform: The expenditure is at a very low 7% with a total projected over expenditure of R 348 thousand. The service with the biggest allocation of R 4 million is with Pretoria RO WCS 050723 – “Old Co-operation Building, Upgrading of Lifts” with zero expenditure for April, May and June. SA Police Service: The expenditure is at a low 19%. There is a total projected over expenditure of R 214 million. The service with the biggest allocation of R 65.3 million is with Pretoria RO WCS 040404 – “Roodeplaat Dog School, Upgrading” with expenditure of R 18.4 million. A re-allocation meeting was held and the client decided not to sign off. They first want to visit the regions to discuss the cash flows and then do a re-allocation

Total number of projects: 1351 Client Capital – Analysis of data Total number of projects: 1351 Projects with forced tender dates 46 Mmabatho 11 (R 37 964 m) Projects in practical and final completion for longer than 12 mnths 220 Special & Major Projects 75 (R 22 728 m) Projects where cons fees exceed 18% of the contract value 377 Durban 59 (R 143 659 m) Reduction in projected expenditure due to postponement on bid and/or practical completion date on WCS - R 629 509 m - R 238 443 m - R 83 850 m

Projected under / over Exp Client Capital Budget per Region   % of total budget Allocation Expenditure % Exp Projection Projected under / over Exp R'000 Office 100% 2,206,388 328,043 15% 2,526,385 -319,997 Head Office 4% 95,852 18,555 19% 174,185 -78,332 Bloemfontein 9% 188,904 8,498 110,833 78,071 Cape Town 14% 300,544 43,393 395,144 -94,600 Durban 24% 522,682 92,958 18% 526,158 -3,476 Johannesburg 6% 134,728 51,044 38% 160,265 -25,537 Kimberley 2% 37,892 6,026 16% 51,085 -13,192 Mmbatho 7% 148,290 12,670 144,859 3,431 Nelspruit 5% 109,290 1,123 1% 30,979 78,312 Polowane 120,799 8,815 59,657 61,142 Port Elizabeth 117,971 8,664 139,577 -21,605 Pretoria 412,467 75,903 711,157 -298,690 Umtata 16,966 393 22,486 -5,520

96% of this budget is allocated to the Regional Offices Client Capital Budget per Region 96% of this budget is allocated to the Regional Offices The three main regions in terms of allocation are Durban, Pretoria and Cape Town. They are responsible for 24%, 19% and 14% of the budget respectively. Combined, they manage 57% of the total Client Capital budget

Approval of the Presentation by the Accounting Officer I hereby, approve the 1st Quarter (April, May and June) Performance and Financial Information of the Department of Public Works for the financial Year 2013/14 MR MZIWONKE DLABANTU DIRECTOR-GENERAL DEPARTMENT OF PUBLIC WORKS DATE:

Thank You Department of Public Works (National ) Head Office: Public Works CGO Building Cnr Bosman and Madiba Pretoria Central Private Bag X65 Pretoria 0001 Website: http://www.publicworks.gov.za