1. DEPARTMENT OF PUBLIC WORKS PORTFOLIO COMMITTEE ON PUBLIC WEORKS PARLIAMENT OF SOUTH AFRICA 13 FEBRUARY 2013 CAPE TOWN DEPARTMENT OF PUBLIC WORKS PORTFOLIO COMMITTEE ON PUBLIC WEORKS PARLIAMENT OF SOUTH AFRICA 13 FEBRUARY 2013 CAPE TOWN

2. 2 Purpose of the Presentation by the Department of Public Works -To reflect on the Quarter 3 information and financial performance of the Department of Public Works in the financial year 2012/13 Objective of the Portfolio Committee on Public Works -Briefing by the Department of Public Works on the third quarter performance of the department for 2012/13.

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4. 4 The third quarter’s progress may be attributed to Turnaround’s strategy. Turnaround has 18 projects that are knotted into the programmes of the Department. Progress on some projects  Immovable Asset Register project focused was on the confirmation of properties devolved to provinces and the confirmation of properties deemed to belong to National DPW Confirmation process is about 80% complete with teams currently following up certain anomalies to ensure that the correct properties are reflected in the asset registers of National DPW, Provincial DPWs and the DRDLR Issues pertaining to the devolution of the rates budget and the status of asset registers in the provinces were discussed in the December MinMec and Special MinMec in January 2013 There is also a process of defining an approach to value IAR using fair value and in this case, applications were made to Office of the Accountant-General The Department obtained state land audit from the Chief Surveyor General for input to the IAR project The Department obtained the User Asset Management Plans prepared by the CSIR from Defence

5. 5  Lease management A team led by the service provider/Programme Manager was deployed to all 11 regional offices across the country to assist with the backlog. The DPW is in the process of establishing a Lease Advisory Committee that will advise the Director-General on the signing and approval of the lease documents relating to new leases, leases in the process of renewal/ extension, as well as expired and month-to-month leases  Supply chain management A draft on the revision of the Supplier Register Directive and application form has been prepared. A draft on SCM Policy that incorporates all applicable circulars and practice notes issues by the National Treasury and CIDB was developed In terms of enhancing skills, regional SCM coordinators and officials were trained.

6. 6  Building of skills in DPW – capacity and capability / reduction of vacancies There is a focus on building the eroded capacity and technical skills in the Department. The turnaround project on building skills is currently working with the Council for Built Environment (CBE) on qualifications processes and also assists in developing professional and technical skills. About 220 professionals have been identified to assist in this regard (100 has been approved)  Re-opening of Workshops Workshops serve a large part of the business of the Department in terms of maintenance. In recognition of the important role played by this function, the project is underway to re-open workshops in the regions – priority at phase 1 will be Pretoria and Cape Town

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8. 8 Output Performance Indicator Annual Target Quarterly target (Q3) Actual progress against target Approved Internal Audit Plan Internal Audit plan developed and approved annually by May 1 Internal Audit plan approved by May 2012 by Audit & Risk Management Committee. Internal Audit Plan (Annual & Three Year Plan) approved by ARMC on 29 May 2012. Internal Audit Reports (Consolidated for Common Audits, and or individual); Progress Report to Audit & Risk Management Committee Internal Audit plan implemented ad Audit reports issued to EXCO and Audit and Risk Management Committee 9 Internal Audit reports issued quarterly to EXCO and Audit and Risk Management Committee 30% of Audit Plan Executed and reports issued. Partially Achieved 19.38%:  (Cumulative for the year, as at 31 Dec 2012 is 41%);  Details of Progress is as follows: Completed Audit Projects (Reports Issued): a.HR Staff Composition Statistics Analysis (IT Audit – Reporting Phase- Summary of findings) a.Transfer Payments - Other Highlights Performance on internal audits improved in Q3 compared to Q2 due to assistance received from National Treasury through secondment of a Director to oversee Head Office Internal Audits sub directorate. performance on investigations declined as the budget was depleted New ARMC members have been appointed and already inducted. Independent review of management actions plans provides assurance to management on effectiveness of actions implemented and improvements The sub-programme co-leads the Turnaround Priority Project 5 – Anti Fraud and Corruption Awareness Campaign.

9. 9 Performance Indicator Annual Target Quarterly target (Q3) Actual progress against target Reduced vacancy rate Vacancy rate is reduced to 15% as at 31 st March 2013 16.5% reduced vacancy rate Vacancy rate currently at 15.33% - 5665 filled posts - 1026 vacant posts - 36Posts advertised: - 44.59% are Women in SMS positions - 1.22%People with disabilities: - 9 Retentions/Counter offers/ salary reviews - 4 Secondments/movements - 2 Transfers to the Department - 71 Appointments: 31 are contracts 40 permanent - 40 contract extensions - EE Policy consulted with all employees for inputs - Retention Policy in final consultation stage - HR Plan in consultation process for inputs Highlights Additional capacity in the Department is taking various forms

10. 10 Effective management of employee relations 100% statutory compliance Functioning of DPWGrievances- 72 received this quarter. 59 finalized and 13 pending. -17 grievances emanating from the previous quarter and previous financial year were finalized this quarter. Misconduct- 18 received this quarter. 09 finalized and 09 pending. -08 misconduct cases emanating from previous financial year and previous quarter were finalized this quarter. Appeals- 05 received this quarter -05 finalized and 00 pending this quarter. Disputes- 09 received this quarter, 02 disputes finalized. 01 dispute emanating from previous financial year were finalized this quarter, Grievances 76 overall grievances were finalized this quarter. Misconduct 17 overall misconduct cases were finalized this quarter. Disputes 03 overall disputes were finalized this quarter).

11. 11 Performanc e Indicator Annual Target Quarterly target (Q3) Actual progress against target Number of meetings co- ordinated 12 meetings coordinated with Inter- Governmental Structures 3 meetings coordinated with intergovernmental structures 11 meetings were coordinated, namely:  Handover of computers at Qebedu JSS in the EC. Stakeholders involved DPW reg. Office, SADTU, and SGB  Meeting on bridges with DOD DEC DPW.  Stakeholders meeting in preparation of EPWP Summit were convened.  Participated in KSD Presidential Intervention Project 15 briefing sessions with Parliamentary committees and 5 oversight visits 5 briefing sessions with Parliamentary committees coordinated 8 Brief sessions with Parliamentary Committees were coordinated, namely:  Briefing on DPW’s Annual report and Entities Annual Reports. 30 internal top governance structure meetings coordinated 5 internal top governance structure meetings coordinated The internal Top Management Meetings (Governance Matters) Meeting reflect the concurrent mandate – MinMec and HOD forums Meetings reflect governance structures Effective coordination and follow-ups on resolutions is important Improvement in the quality of reporting on resolutions made in all the minister’s meetings with the entities

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13. 13 Output Performance Indicator Annual Target Quarterly target (Q3) Actual progress against target To produce a complete and accurate immovable asset register on the assets by 31 March 2014 Number of properties populated with essential information. Populate 10 929 properties Populate 2 732 properties. 10 627 land parcels verified through desktop analysis and updated with Deeds Web and GIS. C-AMP Document Approved Custodian Asset Management Plan (C-AMP) and implementation programs. 100% C-AMP compile DPW CWIP and PMIP C-AMP 100% completed. Compile DPW CWIP and PMIP 54% of C-AMP review completed Increased Revenue Increase in revenue generation.. Increase revenue by R1 643 372 Increase revenue by R410 843 R35 481 revenue received as a result of new leases signed by Regional Offices through AIM’s initiatives. Highlights Deeds review completed Data base received from Dept of Defence as well as from the Chief Surveyor General (CSG) to enhance DPW’s Asset register Desk top review completed and DPW’s Verification process under way

14. 14 OutputPerformance IndicatorAnnual Target Quarterly target (Q3) Actual progress against target Inner City Master Planning: Accepting the proper role and responsibility of government in the City in terms of sustainable policy for change, relevant master planning, and justified regeneration through refinement of government’s footprint to create a modern “government estate” and the packaging of adequate and intelligent head office accommodation solutions for project execution Inner City land availability Agreement between DPW and the City of Tshwane Final Agreement on land availability Land identified for DoJ Head Office Salvokop as a future major government estate, within a well-balanced and sustainable mixed-use precinct, fully integrated with the Tshwane Salvokop Spatial Design Framework PMOs acceptance of SDF Urban design concluded to form basis of township establishment Precinct Plans iro:  Salvok op Final Precinct Plan Salvokop Precinct Plan completed Salvokop bulk infrastructure SLA with City of Tshwane Final Infrastructure Report Infrastructure report completed Highlights Feasibility study in respect of DPW Workshops site in Minaar Street completed. Site to be used for DPW needs instead of co-using the site for taxi purposes CoT is busy compiling a land availability document Infrastructure Projects registered on WCS Motivated for and obtained funding for Infrastructure Projects

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16. 16 OutputPerformance IndicatorAnnual Target Quarterly target (Q3) Actual progress against target NYS learners recruited Number of youth participating in the NYS 3 500 to participate in NYS 2 500 to participate in NYS 1 366 learners participating in NYS Technical Support provided to municipalities implementing projects Number of municipalities reporting on EPWP targets 260 municipalities to report on EPWP targets 200 municipalities to report on EPWP targets 202 Municipalities reported on EPWP targets Number of EPWP work opportunities across all spheres of government reported to EPWP Total number of work opportunities created through EPWP Create 1 210 000 work opportunities Create 800 000 work opportunities Raw data not yet available Provincial roads projects implemented and reported on EPWP Total number of EPWP work opportunities created on provincial access roads. Create 100 000 work opportunities 107 714 as at beginning of January 2013 (not final) Integrated grant disbursed to eligible public bodies (municipalities) % on the incentive disbursed 70%65%74% Integrated grant disbursed to eligible public bodies (provincial departments) % on the incentive disbursed 70%65%96%

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18. 18 OutputPerformance IndicatorAnnual Target Quarterly target (Q3) Actual progress against target Tabling of draft Agrèment SA Bill in Parliament. Agrèment South Africa (ASA) established as a public entity by 31 March 2013. Receive approval from JEC for the creation of a Public Entity. Table ASA Bill in Parliament. RIA is currently being revised. Draft 3 of the ASA Bill is currently being finalised. Draft Built Environment Professions (BEP) Policy. Legislative framework for the BEP amended within the 2012 – 2015 period. Tabling of BEP Bill(s) in Parliament. Consultation process with Professions. Draft BEP Policy developed and circulated for comments. Consultation with internal stakeholders currently underway. Tabling of the Expropriation Bill in Parliament. New Expropriation Bill tabled in Parliament by 31 March 2013, to ensure consistency with the Constitution and uniformity in the expropriation of property by all organs of state. Tabling of Bill in Parliament. Tabling of Expropriation Bill in Parliament. Expropriation Bill (Draft 9) and draft cabinet memorandum seeking approval to publish draft Bill for public comment submitted for approval. Comprehensive presentation to MinMEC on progress with Draft Bill developed. 13 approved Policy Frameworks. Review Public Entities Legislation impacting on DPW. 13 Policy Frameworks approved. 3 Policy Frameworks developed. Draft Accreditation Policy revised and submitted to CBE for final consideration prior to submission by CBE for approval. CPD & Professional Registration policies being redrafted for comments.

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20. 20  Leadership stability  Internal re-alignment at senior level (new posts DDG- Risk Management, DDG – SCM)  Positive effects of Turnaround intervention not yet realised (significant positive impact in 2013/14 & beyond)  Keys Stabilisation projects rolled out  Compilation of the Immovable Assets Register  Review of Leases  Clean Audit Project  Enhancement of Department’s Technical Capability fully underway with appointment of technical professionals

21. 21 Programme Budget Allocation 2012/13 Exp as at December 2012 % Spent as at 31 December 2012 % Spent as at 31 December 2011 R'000 Prog 1. Administration1,047,813482,60046%74% Prog 2. Immovable Asset Management 5,038,3483,697,20773%71% Prog 3. Expanded Public Works Programme 1,728,8121,332,66077%55% Prog 4. Property and Construction Industry Policy Regulation 37,43620,45055%80% Prog 5. Auxiliary and Associated Services 38,83952,007136%80% Total7,891,2485,585,92471%68% Assuming a linear benchmark of 75%

22. 22  Expenditure for all Programmes with the exception of Programme 5 is in line with the guideline.  High expenditure in Programme 3 is due to payments for transfers and subsidies for incentives which are in line with the payment schedule.  Overspending in Programme 5 is due to payments relating to State Functions. A request for the adjustment of funds has been made to National Treasury for the funds to be allocated to offset the overspending.

23. 23 Economic classification Budget Allocation 2012/13 Exp as at December 2012 % Spent as at 31 December 2012 % Spent as at 31 December 2011 R'000 Compensation of employees1,329,9511,036,08778%76% Goods and services783,270430,38254%67% Office Accommodation469,052137,15229%62% Transfers and subsidies4,201,0113,581,82785%76% Infrastructure999,254374, 84138%45% Machinery and equipment108,71025,03623%51% Total 7,891,2485,585,92471% 68% Assuming a linear benchmark of 75%

24. 24  The overall actual expenditure as at the end of quarter 3 is R5.6 billion, 71% of the total allocation, 4% below the linear benchmark of 75%.  Compensation of employees expenditure to-date at R1.036 billion is 78 %, 3% above the linear benchmark –  Goods and Services expenditure for end of December is R430 million, equivalent to 54% of the total allocation.  Expenditure for Office Accommodation is R137 million equivalent to 29% of the total allocation of R469M.  Transfers and subsidies expenditure at R 3.5 billion, 85% of the allocation of R4.2 billion, 10% above the linear benchmark of 75 %

25. 25  As alluded to before, this however is in line with the payment schedule  Infrastructure expenditure actual expenditure for Q3 is R374 million against an allocation of R999 million, represents 38% of allocation.  Expenditure is far below the Linear Benchmark 75% and under spending is therefore projected.  After providing for all commitments, under expenditure at 31 March 2013 is projected at R162 million.  Machinery and equipment expenditure is R25 million which represents a mere 23% of the total allocation of R108 million.

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27. 27 BudgetClaimed to date Actual ReceivedActual Against Claimed R’000 Revenue7,269,8715,882,3264,298,95673% State Accommodation Charges 3,431,0623,202,3842,329,81273% Private Accommodation Charges 3,061,8051,931,6921,529,28879% Management Fees (Municipal) 124,155101,40196,78795% Augmentation646,849 323,42550% Other6,00019,644 Expenditure5,479,678 Deficit as at end of December 2012(1,180,723) PMTE Bank Balance (Overdraft)(2,936,366)

28. 28 BudgetActualAct % Budget R’000 Expenditure7,269,2395,479,67875% Cleaning & Gardening249,051126,06851% Private Leases3,061,8052,306,34575% Rehabilitation, Repair and Maintenance3,174,3042,452,97877% Property Rates742,146589,25279% Municipal Services (Arrears)-1,091- Other41,9333,9449%

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30. 30 Devolved Funds Invoiced Amount Received %’age Received O/standing State-Owned R3.9 BR3.2BR2.3B73%R0.9B Invoiced Amount Received %’age Received O/standing Private leases R1.9BR1.2B64%R0.7B

31. 31  73% of the amounts invoiced have already been received. (This represents 60% of the amount to be invoiced for the year).  46% of the outstanding debt relates to accounts outstanding for more than 120 days  97% of outstanding amounts in total relates to current year  Clients are resistant to pay as we are still not in a position to compile itemized billing  Engaging with the OAG for an approval to continue invoicing on the basis of the devolution until the IAR programme is complete.

32. 32  20% of the money received against this item relates to prior years.  64% of amounts invoiced have been received.  73% of the outstanding amounts for the current financial year are less than 90 day.s  R33 million (1.8%) has not been claimed as it relates to disputed properties where the Client either disputed occupation or the rental being paid.

33. 33 National Department of Public Works (NDPW) Head Office: Public Works CGO Building Cnr Bosman and Madiba Pretoria Central Private Bag X65 Pretoria 0001 Website: http://www.publicworks.gov.zahttp://www.publicworks.gov.za